Bitcoin OK for politics, with $100 limit
The Federal Election Commission on Thursday approved the use of the alternative currency Bitcoin for political contributions with limits of $100 per donor per election cycle.
The 6-member panel voted unanimously to allow the contributions, a move that could open the floodgates for donors to make political contributions with the digital currency in the upcoming midterm elections.
The decision means that political groups or candidates can accept Bitcoin if they abide by the same guidelines that the political group Make Your Laws set forth when it asked for the commission’s approval. Bitcoin political contributions would be clearly identified and limited.
Proponents say it’s a sign of increased acceptance of the upstart currency, as more businesses and individuals are starting to embrace Bitcoin paymentsas an alternative to credit cards.
“It’s still a pretty good step, we’ll be allowed to accept Bitcoin in the way we proposed,” said Sai, who runs the political group Make Your Laws. “It’s probably good for the Bitcoin economy as well.”
Sai is his full legal name, and his Make Your Laws is a nonpartisan group. Its website says its aim is to use technology to give individuals a louder voice in elections and democracy.
The decision was monitored by the Bitcoin Foundation, a lobbying group that also asked the commission to approve the use of Bitcoin for political fundraising.The decision is a turnaround from last fall, when the election commission deadlocked on a similar request.
With no official laws barring the use of Bitcoin in elections, a handful of candidates and political groups have said they’re already accepting Bitcoin. They can continue to do so, but they risk getting reviewed and possibly penalized by the elections panel if they go beyond the election commission’s Thursday decision.
Texas Attorney General Greg Abbott, who is running for governor in that state, said last month he’d accept donations in Bitcoin. The Libertarian Party also collects between $10,000 and $20,000 in Bitcoin each year. It’s a small percentage of the $1 million it raises annually, according to Libertarian Party Executive Director Wes Benedict.
The developments come as Bitcoin is under increased scrutiny. Last month, Attorney General Eric Holder told lawmakers that virtual currencies pose a challenge for law enforcement agencies, because they can be used to hide illegal activity.
Bitcoin has grown in popularity in large part because transactions with it are anonymous.
That has led to its use on the black market such as occurred on Silk Road, the online site for marketing illegal drugs and other items, until the FBI shut it down last fall.
To ensure that Bitcoin contributions follow the election commission’s guidelines of transparency in campaign contributions, Sai’s group requested that the donations be clearly identified and capped.