Much like your Dad whipping out the phrase “YOLO” in front of your friends to prove how hip he is to the kids these days, American politicians are jumping on the Bitcoin bandwagon to show the young-and-cryptocurrency-minded how in touch they are with technology (while, of course, making money at the same time).
Democrats and Republicans alike have begun accepting campaign contributions in Bitcoin following the US Federal Election Commission (FEC) opinion issued earlier this month that political committees should be allowed to accept $100 worth of bitcoin per donor per election.
(The $100 limit, for the record, is a request rather than a demand: the FEC doesn’t have the authority to put an official cap on Bitcoin contributions.)
Apart from the obvious monetary payoff, accepting Bitcoin donations now shows that politicians are on the ball as the still (relatively) nascent digital currency market develops, cryptocurrency startup CEO and former political strategist Robert Molnar told California news outlet SFGate.
“What it does is say, ‘Hey Millenial generation, I’m cool too,’” SFGate quoted Molnar as saying. “This may not be a big policy issue this year, but in 2016 it will be huge.”
Though accepting Bitcoin contributions haven’t yet entered the political mainstream, at least four high-profile candidates have set up Bitcoin wallets for donations: California Lt. Governor Gavin Newsom, Oakland (CA) mayoral candidate Bryan Parker, Texas gubernatorial candidate Greg Abbott, and Colorado State Representative Jared Polis.
If you check out the political histories of these candidates, as well, their decision to lead the charge on modernizing political contributions isn’t too surprising.
Most of them have entrepreneurial pasts: Newsom has co-founded 11 businesses, and Parker is a former business executive and Bitcoin angel investor who put on a Bitcoin fundraiser back in January.
Polis founded a greeting card website with his parents that he sold three years later for $780 million, and made more hundreds of millions of dollars from buying and selling internet companies in the 1990s.
The clear outlier here is Abbott, a Republican lawyer from Texas, but maybe he just has a really good campaign manager.
How exactly Bitcoins are going to fit into politics, however, is still a tricky issue. The role of money in elections is a sensitive issue for the US, as many people interpret the topic as a question of free speech. The US government has a mass of detailed laws regulating who can donate money to political candidates and how much.
Though the FEC opinion (which was unanimous at 6-0) to allow Bitcoin donations provided some guidance, the individual FEC commissioners still disagree on what their own opinion means.
FEC Chairman Lee Goodman wrote in a separate advisory opinion that the decision meant Bitcoin should be regulated like in-kind contributions (goods, services, and transactions not involving money), meaning that donating Bitcoin is more like giving a politician a painting than contributing $20.
Vice Chairwoman Ann Ravel, however, completely disagreed with Goodman’s interpretation, writing that “there was never any understanding that this would be treated as either cash or in-kind.”
The conflict highlights a trend developing within US government as the federal and state governments, alongside the various state agencies and regulatory bodies, struggle to come up with a definition and policy on Bitcoin that works for them.
Luckily, Bitcoin users aren’t affected by government back-and-forth and foot-dragging: a fact that FEC Chairman Goodman noted and endorsed in his Bitcoin opinion.
“Technology cannot and will not wait until government regulators are comfortable to move forward, experiment, and innovate,” Goodman wrote. “Innovation and technology should not and will not stand idly by while the Commission dithers.”
…Can we get a round of applause?
