Some candidates have already accepted Bitcoins, but rules about their use are not clear. FEC reviews Bitcoin donations

Coming soon to a political campaign near you: Bitcoin donations?

The Federal Election Commission is poised to determine rules governing donations made in Bitcoins and how they apply to political campaigns.


Attorneys for Conservative Action Fund PAC asked the agency decide if political candidates and outside groups are allowed to accept the digital currency, in addition to U.S. dollars.

“As increasing numbers of individuals trade in Bitcoin, political parties and candidates also wish to accept and spend this new currency,” Dan Backer of DB Capitol Strategies wrote in the request. The request lays out 24 technical questions for the FEC regarding the use of Bitcoin as political contributions.

Backer told POLITICO that he expects that by 2014, many federal candidates will be interested in accepting the currency — and that many donors will demand it.

“We see a real future for this, especially among libertarian-minded supporters,” Backer said.

Backer said that a few PACs and minor party candidates had already decided to take Bitcoin donations — but that the rules about their use were not clear. Backer said he wants further FEC guidance on the rules.

Among the technical questions for the FEC: do Bitcoin donations to a candidate count as either a monetary contribution or an in-kind contribution? Does the FEC consider Bitcoin a currency or a good?

And like many national currencies, Bitcoin fluctuates in value. When exchanges for the currency first debuted, a single bitcoin was worth no more than a few dollars. Individual Bitcoin are now worth more than $100 a piece.

The currency — which is traded on multiple 24 hour-a-day/7 day a week exchanges — poses a problem for some campaigns and PACs, which are limited by law in how much money they can accept.

The fluctuations in Bitcoin’s value could pose complications for campaign committees trying to stay within contribution limits set by law. Conservative Action Fund is a so-called hybrid PAC that’s allowed to both contribute directly to candidates and make unlimited independent expenditures.

In the 2013-2014 cycle, federal law limits donations to $2,600 per individual per election to candidates and to $32,400 to political parties. PACs may give up to $5,000 per candidate, while other outside groups can make unlimited independent expenditures.

Bitcoin, which allows for anonymous, encrypted digital transactions, has come under fire from regulators in recent weeks — who worry about the lack of oversight and the currency’s potential use in crime.

Supporters of the currency say that it solves what they see as the problem with nationally-controlled central banks (namely, inflation) and privacy. The currency is infamous for its use on ‘dark web’ sites like Silk Road where guaranteed anonymity is built into all Bitcoin transactions — something that could pose a problem for campaigns and PACs.

In theory, federal law allows anonymous contributions of up to $50 — but in practice, almost all political parties, candidates and PACs collect information from every donor, no matter how small.

If Bitcoin ever becomes common in political contributions, anonymity will not be guaranteed. Instead, campaigns will accept it like they accept Visa or MasterCard, Backer said.

By law, the FEC has 60 days to respond to the request — but an extension of that deadline is possible.