The FEC would require any Bitcoin contributions to be converted into dollars. FEC may OK Bitcoin donations

Political campaigns will be allowed to accept — but not spend — the digital currency Bitcoin, under a proposed federal rule released Thursday.

The Federal Election Commission draft would require campaigns to first convert any Bitcoins collected as donation to dollars.


According to the proposal, the currency will count as an “in-kind” contribution to a campaign — like a stock or bond. The FEC will not consider them currency.

“Because Bitcoins are neither the currency of any country nor negotiable instruments, Bitcoins are not ‘money’ under commission regulations,” the committee concludes. “Therefore, a political committee that receives Bitcoin contributions may not treat them as monetary contributions.”

Bitcoin and other digital currencies are attractive to many because they allow for anonymous, encrypted digital transactions. But concerns about their use in online crime and money laundering has brought new scrutiny from regulators in recent months — who worry about the lack of oversight and the currency’s potential use in crime.

Campaigns are permitted to accept non-monetary contributions like stocks, private stocks, commodities, and equipment— but must list their value in dollars on campaign finance reports.

Attorneys for Conservative Action Fund PAC asked the agency in September to decide if and how political candidates and outside groups are allowed to use 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 on behalf of the Fund. The request asked the FEC 24 technical questions regarding the use of Bitcoin as political contributions.

Bitcoins can now readily be converted between currencies at a number of online exchanges, and converting them to dollars will pose an issue for campaigns.

If a Bitcoin exchange service charges a conversion fee to dollars, campaigns will have to consider the fee as part of the initial donation. Because the value of the currency floats, campaigns will have to be careful not to accept donations above federal campaign contribution limits.

Members of the public are permitted to submit comments on the draft opinion until November 13.

The full commission will vote on whether to formally adopt draft the rules at an upcoming meeting of the body.