Concerned it was being left behind by the fast-moving high-tech and social media world, the Federal Election Commission Thursday swiftly and unanimously approved the use of Bitcoin, the virtual currency, in political campaigns.
Because they are not traditional currency, the chairman of the FEC said bitcoins would be treated as in-kind contributions and those could go as high as $2,600 for an individual or $5,000 to a political action committee under current laws.
The FEC voted 6-0 in favor of allowing Make Your Laws PAC to accept bitcoins. Democrats were happy because the group said they would limit contributions to $100.
But Chairman Lee E. Goodman issued a seven-page statement on “advisory opinion” that concluded there is no $100 limit. “Although bitcoins may share characteristics with traditional currencies, they are not issued or guaranteed by the United States or any other foreign country. Thus, by its plain language, the [FEC Act of 1971] $100 limitation on cash contributions does not and cannot apply to bitcoin contributions,” write Goodman.
“The commission lacks statutory authority to expand on the plain, unambiguous language of the Act to extend the $100 limit on cash contributions to bitcoins, regardless of policy arguments marshaled in favor of such course,” he added.
The FEC had previously deadlocked on the issue, but Goodman said that the agency decided to catch up with technology and act so that groups knew the bitcoin rules of the road before using them became the rage.
“New technology has moved forward without the commission,” said Goodman. “Innovation and technology should not and will not stand idly by while the commission dithers,” he said.
In their decision, the commission said that PACs can buy or accept bitcoin donations, but must convert them to currency before depositing them in a campaign account. A standard disclosure rule also applies to those who give $200 or more.
The Bitcoin system is a virtual, international currency system that trades in bitcoins. They are priced by the currency market, like dollars sold between traders. Some companies already accept them, such as WordPress, Overstock and Reddit.Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at email@example.com.