The US Federal Elections Commission (FEC) is proposing a measure that would allow election campaigns to accept bitcoin donations, but they would not be treated the same as cash currently is.
In an opinion letter dated 7th November, the FEC responded to a group called Conservative Action Fund (CAF) regarding its request to have an opinion about the acceptance of bitcoin donations. The opinion states that CAF can accept donations in bitcoin, but must sell them for cash in order use them for any sort of payment.
“The Commission concludes that CAF may accept bitcoins as in-kind contributions under valuation, reporting, and disbursement procedures,” the letter states.
“CAF may not, however, make disbursements using bitcoins. Instead CAF must sell its bitcoins and deposit the proceeds in its campaign depositories before using the funds.”
CAF has told the commission its plan is to use a payment processor to accept bitcoin donations, and uses the company BitPay as an example of a provider it might utilize to do so. The letter states:
“Under the BitPay model, CAF could choose whether to receive the contribution in the form of bitcoins transferred to CAF’s bitcoin wallet, or in the form of US dollars transferred to CAF’s bank account.”
It’s clear the FEC wants to make sure that any bitcoin donations are not made anonymously, a key feature that bitcoin enthusiasts champion about the decentralized virtual currency.
“CAF represents that it would acquire and record the ‘relevant’ information regarding each contributor who makes a contribution to CAF using bitcoins, such as the contributor’s name, address, occupation, and employer, as applicable,” says the letter.
The US government is paying a lot of attention to bitcoin. The Senate Committee on Homeland Security, chaired by US Senator Tom Carper (D-DE), is set to meet next week to “dig into what a whole-government approach to this new and unique technology may look like”.
“Bitcoins are not currency of the United States or any other nation, and they are not negotiable instruments.”
One of the reasons bitcoin is being closely watched more than ever is its burgeoning value. Another is that some agencies, specifically law enforcement, are starting to see a rise in virtual currency-based fraud and scams.
It’s clear that the FEC does not consider bitcoin as cash under its policies, but that it has monetary value.
“Bitcoins do not meet the Commission’s regulatory definition of ‘money.’ Bitcoins are not currency of the United States or any other nation, and they are not negotiable instruments,” the letter states.
The Uniform Commercial Code defines a ‘negotiable instrument’ as an “unconditional promise or order to pay a fixed amount of money” to a bearer or order on demand, or at a definite time.
“Unlike checks and money orders, bitcoins do not grant their holders an ‘unconditional’ right to be paid in currency,” the letter adds.
Public comments of draft advisory opinions such as this are open to public comment. The deadline for comment on this particular advisory opinion is today.