The Federal Election Commission is deliberating whether political contributions may be made in Bitcoin, and if so, how. The commission has until October 28th to determine whether donations in the emerging virtual currency comply with campaign finance restrictions, in response to a request filed last week by the Conservative Action Fund PAC.

Some politicians are already accepting donations in Bitcoin — it's especially popular with Libertarians — and Bitcoin proponents say it will be widely used during the 2014 election cycle. Campaign finance regulations have been updated to reflect advances in technology and accommodate electronic payments, but Bitcoin presents unique problems due to its fluctuating value, ambiguous legal status, and unprecedented format.

Current law says contributions exceeding $100 must be made by check, money order or "other written instrument." This now covers PayPal, credit cards, and donations by SMS, so it's not crazy to think that it could apply to Bitcoin. However, donations are required to be in US dollars, which could be grounds to reject Bitcoin. The commission may also sanction Bitcoin is an "in-kind donation" like office supplies or furniture.

Users could be voting with cold, hard Bitcoin

Regulators in Washington have been paying attention recently to the virtual currency, which supports a billion-dollar alternative economy of techies, libertarians, Argentinian citizensChinese speculators, and other early adopters. The US government has tentatively recognized the currency's legitimacy, but its potential usefulness for terrorists and drug dealers could still provoke legislators and regulators into outlawing it. The fact that multiple Bitcoin companies are involved in lawsuits in the US doesn't help.

Lately, Bitcoin advocates in the US have been trying to win Washington over. The Bitcoin Foundation, a nonprofit that serves as the closest thing to a central authority for the decentralized currency, has started lobbying on Capitol Hill. If the FEC approves the use of the currency in political campaigns, its users will have a very easy way to make their voices heard: by voting with their cold, hard Bitcoins, currently worth $140 apiece.