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The FEC published an opinion letter on November 7 in response to a request regarding the its stance on Bitcoin donations. The commission’s response to the request, made by a group called Conservative Action Fund, states that the group may accept Bitcoin donations, but those have to be
The FEC published an opinion letter on November 7 in response to a request regarding the its stance on Bitcoin donations.
The commission’s response to the request, made by a group called Conservative Action Fund, states that the group may accept Bitcoin donations, but those have to be exchanged for cash before they can be used as payment.
Bitcoin, then, would not be treated the same as cash, but it could be used to support political campaigns.
The letter states, “The Commission concludes that CAF may accept [B]itcoins as in-kind contributions under valuation, reporting, and disbursement procedures.”
CAF’s request cited BitPay as an example of a Bitcoin payment gateway it might use.
The commission’s letter addresses that issue as follows:
“Under the BitPay model, CAF could choose whether to receive the contribution in the form of [B]itcoins transferred to CAF’s [B]itcoin wallet, or in the form of US dollars transferred to CAF’s bank account.”
A key point is that the FEC does not want Bitcoin to be a tool for anonymizing donations, although anonymity is a primary benefit for the virtual currency’s users. The letter instructs CAF to collect “relevant” informational details for each Bitcoin donor, including name, address and occupation.
This all represents another insight into how the US government is grappling with the disruptive technologies of virtual currencies. The Senate Committee on Homeland Security plans to review Bitcoin in Washington, a move sparked by the rapid rise in Bitcoin’s value, which recently crossed the $700 mark.
The FEC, for its part, takes great pains to state that Bitcoin is not US currency — or national currency elsewhere, for that matter — but it does recognize Bitcoin’s value.
One important distinction the letter also makes is that Bitcoins do not constitute “negotiable instruments.” The US Uniform Commercial Code defines those as “an unconditional promise or order to pay a fixed amount of money,” and Bitcoins — unlike, say, checks — do not grant anyone the right to be paid in currency.
This is just one more example of how decentralized currencies will continue to cause friction for national governments beholden to certain economic paradigms.
As has been seen in other states and nations (see California and Israel as recent examples), governments struggle to impose regulations or taxation on Bitcoins.
Keep following here, as much more is sure to unfold in this space.
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