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Bitcoin could soon be approved for campaign donations

Bitcoin could soon be approved for campaign donations

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The Federal Election Commission (FEC) is moving to allow Bitcoin donations as a campaign contribution in national races. Under the rules, Bitcoin donations would be considered "in-kind contributions" rather than direct money contributions, because the digital currency isn't the official currency of any nation and doesn't entitle holders to the ability to exchange it for cash like a check or money order might. The rules were proposed in a draft yesterday, and according to The Hill, they'll likely be approved later this month.

Bitcoin donations will be treated a lot like stock

Despite Bitcoin's complexity, the rules governing it wouldn't be particularly complicated. The FEC proposes that Bitcoin acts much like stock does: it doesn't have an inherent value, its value often fluctuates, and it can sit around for any amount of time before it's traded in for cash. Like stocks, deciding how much a Bitcoin donation is worth will require looking to its exchanges. The value of a stock donation is based off of its exchange's closing value, but since Bitcoin exchanges don't close, the FEC proposes using the valuation given the very moment the donation is received.

Bitcoin may not be used for disbursements, however — they'll have to be turned into cash first under the rules. And like other contributions, Bitcoin donations would still be subject to individual limits. Donations in excess would be allowed to be paid back in either Bitcoin or a cash equivalent, however. The rules are fairly straightforward and should allow proponents of the digital currency — libertarians in particular, according to The Hill — to begin using it as 2014 midterm elections approach.