Bitcoin is used in donations for several political campaigns, in many places. While some of the places are continuing the practice, many others have banned bitcoin donations. In very recent, California banned use of the bitcoin for donation purposes in the political campaigns.
Fair Political Practices Commission (FPPC) of California, comprised of five members, is in charge of looking after the political processes by effectively administrating the Political Reform Act of 1974. The commission, comprised of four member at that moment, voted 3-1 against the bitcoin donations and therefore banned it. The commission pointed out that due to the difficulty faced while tracking the donations and their origin, transparency issues are likely to rise. Michael Tozoni, bitcoin economist, investor, and entrepreneur, told BlockPublisher his take on involving bitcoin in politics. He said:
I suspect bitcoin will eventually be very popular for paying politicians under the table, since you can just meet a politician, give them twelve words to write down, and by that give them millions of dollars without anyone knowing.
While FPPC has banned bitcoin donations, Federal Elections Commission (FED) still allows federal candidates to accept donations of less than $100 worth in the form any cryptocurrency. Previously, the Wisconsin Ethics Commission worked out the matters in Wisconsin by limiting cryptocurrency donations and allowing not more than $100 worth donation. Larger amounts were suggested to be channeled through the banks.
In Taiwan, cryptocurrency made its way in to the political campaign. Hsiao Hsin-chen, a candidate for Taipei City Council, marked the first ever involvement of cryptocurrency in political campaign by accepting bitcoin donations. He received bitcoin of NT$10,000 worth after declaring bitcoin donations acceptable on his Facebook account. Hsiao Hsin-chen suggested that bitcoin donations can maintain a clean political system in Taiwan. As bitcoin provides transparency, bitcoin donations can introduce transparency in politics with the aid of blockchain technology, that makes forging of donations very difficult.
At the moment, Taiwan has not regulated the use of cryptocurrencies yet. Bitcoin donations are considered as non-cash political donation, therefore, subjected to all rules and regulations associated with non-cash donations. Under Political Donations Act, non-cash donation can’t exceed NT$10,000. If the amount increases than the threshold mentioned, then politicians have to return the excess amount to the donor or hand it over to the state.
As bitcoin prices fluctuate over time, the criteria of estimating the worth of donations remains unclear. With the acceptance of bitcoin donations, the problem of estimating worth of digital currency arises that may introduce complications in the system. In future, we will see how this problem is addressed by different countries.