Campaign finance could be going digital in Virginia. The Virginia General Assembly recently introduced a bill titled HB 687 on campaign finance reform. The bill would allow digital currency as a form of monetary contribution to campaigns. Making the leap into campaign finance would be a big win for digital currency.
So how exactly would a digital contribution work under HB 687? The value of the digital currency would be determined by its market value at the time of the transaction. So any increase to the market value afterwards would have to be reported as interest on the campaigns finance report. One catch to all of this, is that to spend any of the digital currency, it must first be sold on the market, and then have those funds be placed back into dollars. Only then can those dollars be spent.
“Campaign finance; digital currency as an accepted form of contribution. Provides for the acceptance of contributions to a candidate, campaign committee, or political committee in the form of digital currency. The bill provides that such contributions shall be valued by the market value of the digital currency at the time the contribution is received and requires that any increase in the value of the digital currency while in the committee’s designated depository be reported as interest on a campaign finance report. The bill also requires the treasurer for any campaign or political committee to sell any digital currency contributed to it and deposit the proceeds from the sale into the designated depository before the funds may be expended. The bill defines digital currency as money represented by digital information that is stored, spent, and transferred electronically as part of a financial transaction. All provisions governing the acceptance and reporting of contributions apply to contributions in the form of digital currency.”
– HB 687, Virginia’s Legislative Information System
On a national level, digital currency has been making its way into campaigns such as Rand Paul’s. Paul is one of the first presidential candidates to accept donations in bitcoin. The FEC says that, under US federal election laws, the digital currency must first be sold on the market and the proceeds are placed back in the campaign depository before being spent. Essentially the same as Virginia’s HB 687. On top of this, the FEC has capped the contribution value of digital currency at $100. Federal election laws apply to the U.S. House, Senate and Presidency.
Needless to say, donating digital currency is still in its political infancy. There is still a large amount of red tape that is causing widespread adoption to sputter. While this is a step in the right direction for allowing digital currency into campaign finance, eventually allowing digital currency to be spent without conversion is the ultimate goal.
About the author: Tyler Molihan is a Marketing Intern at Follow My Vote. He hopes to increase awareness about the benefits of online voting systems.