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It was only a matter of time before Bitcoin entered politics.
Earlier this week, the North Carolina State Board of Elections Campaign Finance Office denied Republican candidate Emmanuel Wilder from accepting campaign donations in Bitcoin or other digital currency. The Board outlined the following issues:
North Carolina’s campaign finance regulations set monetary limits in US dollars.
Bitcoin and other digital currencies cannot be reliably valued.
Additionally, campaign finance watchdogs have argued that the potential anonymity of digital currencies may make it difficult to comply with state disclosure requirements — both who is donating and the amount that is donated.
This issue is not exclusive to North Carolina though. Last year, the Kansas Governmental Ethics Commission prohibited state and local candidates from accepting campaign donations in Bitcoin. Then in June, a candidate from Missouri was required to return a $130,000 Bitcoin donation because it violated the upper limit for individual contributions ($5,400).
What is the irony in all this?
In 2014, the Federal Election Committee explicitly approved federal candidates to accept campaign donations in Bitcoin. The regulatory body even created and circulated specific rules around Bitcoin donations and collections. Bitcoin and politics don’t only intersect during campaign finance debates though.
The House Ethics Committee now requires any lawmaker to publicly reveal all digital token holdings over $1,000 in value. The first Congressman expected to report his holdings is Bobby Goodlatte, the chair of the House Judiciary Committee (he reportedly owns between $17,000 and $80,000 in Bitcoin, Ethereum, and Bitcoin Cash).
So if Congressmen are holding tens of thousands of dollars in digital currencies and federal candidates are allowed to accept these digital assets as campaign donations, why are state regulatory bodies preventing state candidates from doing the same?
The answer lies somewhere between fear and lack of understanding. In essence, people fear that which they do not understand. This shouldn’t be a viable reason though. The solution to campaign finance rules around Bitcoin should be simple:
Require KYC/AML verification of digital wallets that make political donations.
Require stringent reporting from candidates on who donates and how much.
Require candidates to conform to a single standard for valuing all digital assets.
Require donors to abide by existing campaign finance limits, both individuals and corporations.
These four simple rules should clean up most of the uncertainty. It should lead to a more transparent, fair campaign finance environment, where donors have the freedom to choose which currency they hold their wealth in.
Change rarely happens quickly. However, we are slowly watching digital assets infiltrate every aspect of our lives. As I always say, the virus is spreading…
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