Are Bitcoin and cryptocurrencies really being used to finance political campaign? Sounds interesting as well as suspicious! Let us try to find out.
Cryptocurrency market is currently the most growing industry in the world. Politicians have now been involved in the Cryptocurrencies to finance their political campaigns. Cryptocurrencies are proving to be more reliable which has switched the way of financing the political campaigns in the recent times. Over the last few months, many states in the United States have started adopting the Cryptocurrencies to given proper base to their financial campaigns.
Federal Election Commission (FEC) is the major point to handle the financing campaigns during the elections. Digital Currencies have a completely separate market and to boost up their chances in the election, this non-regulatory digital money started adopting by the major candidates lately.
Initially, the Federal Election Commission came up with proper guidelines in the year 2014 regarding the involution of Cryptocurrencies in the Elections. During this period, the actual value of the Bitcoin was around $400. FEC approved to accept this digital currency as the in-kind donation to boost up the election campaigns. With the effect of the new rules and regulations, Bitcoins can be accepted as the in-kind donation but can’t be spent in the election campaigns. For that, the candidates need to deposit this digital currency in their accounts and convert it into the legal currencies. This way they can spend the Bitcoins in their political campaigns. To make the entire system transparent, this was the best solution provided by the FEC.
The commission has set standard cap which was later expanded to $2,700 by some politicians. Ever since the Federal Election Commission’s ruling guidelines came up, many authorities of different states started enquiring about it. Most of the authorities and candidates have one question in common and I.e. Whether these digital currency donations are appropriate? And if yes, how they should be governed by the commission?
One of the pioneers is Andrew Hemingway. He is the youngest candidates in New Hampshire. When Bitcoin was introduced, New Hampshire has accepted bitcoins in a large number with the help. At the initial stage, there was no any tough rule made or any guidelines provided by the government. Initially, they were defending the Cryptocurrencies so it has gained a lot of benefits during the early days.
Andrew Hemingway was quite sure about his act, even he argues with the authorities with valid points that many of his contributors want to donate their money in the form of digital currency to the party. With the effective argument, he achieved over 20% of the total contributions through Digital Currency I.e. with the Bitcoins. Unfortunately, he could not win the election; however, he set out a new trend in the world, especially in the Elections to accept donations in the form of Digital Currencies.
After Andrew Hemingway, many politicians from different states started using this mode of receiving donations such as a U.S. Representative Jared Polls who is the most outspoken candidate about accepting Donations in the form of Cryptocurrencies. He claims to be the first Congressman to accept Bitcoin and cryptocurrencies from his supporters. During his 2014 election campaign, Jared Polls got $2,000 worth of Bitcoins as donations.
The next candidate was Dan Elder who is the first Representative to have an entire election Campaign with Bitcoin’s donations. However, he didn’t do well in the election and he had collected only 10 percent votes. Still, Dan had created a new benchmark for the other candidates who were also trying to get into the Cryptocurrency market to receive donations from their supporters.
Rand Paul became the very first Presidential Candidates in the year 2016 with a Bitcoin-Friendly environment in the elections and their campaigns. He had collected a huge amount of money as donations through Bitcoins during late 2015 before he announces his bid for the year 2016.
Texas Attorney General Greg Abbott announced in the year 2014 that Cryptocurrencies are very important in terms of receiving donations from the supports who live in different locations and states. He had also announced that he will start receiving donations in Bitcoins for his upcoming Campaign. His move worked out well and he was elected as the Governor of the State.
Apart from this, there are a few other examples of politicians who have accepted donations in the form of Bitcoins for their electoral campaigns. If we talk about the other politicians, Austin Petersen- The U.S. Senate, Patrick Nelson- Democratic Candidate for Congress from New York, U.S., Brian Forde- Democrat candidate for the U.S. House and so many more.
The donations which the candidates receive in the form of Bitcoins or we can say, Cryptocurrencies should be treated as special donations as the FEC approved the contribution of Bitcoins in the initial stage already.
Cryptocurrencies or Digital Currencies and their impacts in the modern society are unusual and people have themselves figured it out. Since the FEC has set out proper guidelines while receiving donations in the form of Digital Currencies, there is a proper transparency in the system available. With this, the commission can have the address and other contact details of the person who has donated to a particular candidate in Bitcoins.
Receiving funds in the form of Digital Currency can invite plenty of illegal activities to the system without the proper awareness. For that reason, many states have prohibited Bitcoins contribution in the system a long ago. Election campaigns should be transparent enough to let people know the real power of the candidates. Putting proper trust on the candidate is what helps them win the election and not the money.
In the coming years, Cryptocurrency community will reach to a new height to decentralize the election campaigns. Once approved by the FEC, it will change the way how current election campaigns are forming the governments.
FEC is still looking for some tough laws against this form of the donation in the campaigns. Many candidates are criticizing centralized banking in Cryptocurrency. They also defend that the received donations don’t belong to the Federal Reserve. However, FEC will not let the Candidates receive donations in Bitcoin and cryptocurrencies as the money can be used for illegal activities to win the elections.