Bitcoins for Campaign Donations?

Bitcoins, the online currency, are gaining in popularity as more and more people use them because of the high-level of privacy they provide for consumers. But, there are a number of issues that need to be straightened out before they can be used as political donations.

Erik Nilsson writes at Campaigns and Elections Bitcoins may soon become a big fundraising avenue for political campaigns, but since there’s no standardized value of the currency, but it could open up a big box of trouble as well.

A huge benefit to consumers who use Bitcoin is the privacy Bitcoin insures when consumers make payments. This high level of privacy is a big reason why many of the early Bitcoin adopters include online porn or drug consumers. Should the FEC allow political donations with Bitcoins, federal political organizations would need to be vigilant in their collection of name, addresses, employer and occupation for these Bitcoin donations over $200 per the current FEC reporting requirements.

The FEC has a great track record of looking seriously at new technologies in order to facilitate citizen involvement with politics. In the case of Bitcoins, until there is a standard accepted exchange rate, I believe it will be next to impossible for FEC to allow Bitcoin political donations.

That being said, the Bitcoin world is changing fast, and I wouldn’t be surprised if cyber currency makes a significant impact in the 2016 election cycle. The FEC will probably respond to the request for ruling in late October or very early November, although an extension is possible.