Will digital dollars soon fund U.S. political campaigns? If a conservative political action committee has its way, supporters will be able to donate to federal elections using bitcoins, a relatively new form of virtual currency. The Conservative Action Fund PAC this week asked the Federal Election Commission to approve rules governing the use of this online form of currency. The move seeks to push the technology envelope for federal regulators who just last year endorsed political donations via text message for the first time. The FEC has 60 days to respond to requests such as these but can extend the amount of time it takes to consider the matter. “As bitcoins become a bigger part of the economy, we see a future in this … particularly among libertarian-minded voters,” said Dan Backer, the Conservative Action Fund lawyer who filed the FEC request.
Bitcoins and other online currencies allow users to transfer assets from virtual “wallets” without using banks or other financial institutions. The transactions make it easy to move money globally. They incur no fees and are difficult to trace.
Although the currency isn’t recognized by any nation, the global bitcoin market this year exceeded $1 billion in value.
The use of bitcoins to finance campaigns raises an array of technical and legal issues, Backer said.
For instance, bitcoins are traded like currency and their value against the U.S. dollar can fluctuate wildly. Campaigns are required to report donations that exceed $200 to federal regulators. How should a political committee handle a bitcoin contribution of $199 that jumps in value to $205 by the time the deposit hits the committee’s campaign account?
Full Article: Regulators to weigh bitcoin donations in politics.