The Promise and Peril of Bitcoins in Politics

The recent decision by the FEC to allow Bitcoins for political donation holds a lot of promise and pitfalls for political campaigns.

Roll Call digs into the issue and what it means for political donations going forward.

Thought bitcoins have been growing in popularity among political players, particularly libertarians, the currency still occupies only a tiny fraction of the marketplace at large. The current value of a bitcoin has reached $345 and GOP lawyer Dan Backer, who is representing the Conservative Action Fund, told the FEC that all bitcoins in circulation now exceed $1.3 billion in total value.

But bitcoins have also been implicated in Ponzi schemes and money laundering, and the Securities and Exchange Commission has warned investors to beware of virtual currency scams. The value of bitcoins has fluctuated wildly even in the past year, and some technology analysts have warned of a looming “Bitcoin bubble.”