Published on January 18, 2014 at 10:30 BST | Analysis, US & Canada
At a New Year’s Eve event in the NYC Bitcoin Center, congressional candidate Steve Stockman went all out for bitcoin.
A Republican representative in the Texas 36th District, Stockman wore a QR code associated with a bitcoin address, encouraging BTC donations for his Senate campaign.
Stockman needs the money. According to USA Today, his campaign lacks the financial resource of his incumbent opponent, Senator John Cornyn, whom he will face in a district Republican primary battle.
USA Today also reported that Cornyn’s campaign account contains $7m, while Stockman has $32,000. It’s no wonder that the candidate was comfortable wearing a QR code at this end-of-year soiree.
And Stockman will surely not be the last political figure to promote the ethos of bitcoin. The currency can be an intriguing notion for politicians.
On one hand, a virtual currency like bitcoin could threaten a political figure’s constituents, because of its unregulated nature. On the other hand, bitcoin could be a veritable moneymaker for campaign fundraising. Let’s take a deeper look.
The bitcoin committee
The Bitcoin Voters Political Action Committee is a recent example of how the Federal Elections Commission (FEC) is just one part of the regulatory puzzle for bitcoin. Although the political action committee (PAC) was an interesting idea, ultimately it did not last long. Its official website states:“Due to the new compliance issues at the state level, we are unable to continue operations at this time. We would like to thank the FEC for their acceptance of bitcoin addresses instead of a bank account for deposits.”In November, the FEC deadlocked on a resolution regarding how PACs could treat bitcoin donations. However, the Commission was able to offer some guidance that bitcoin should be treated as an instrument of value such as a stock or a bond.
Yet compliance issues are still murky at state level. This can be attributed to the fact that each state is responsible for a number of regulatory issues in terms of campaign finance laws.
This lack of regulatory clarity mirrors the problems that bitcoin still presents at state level. Bitcoin businesses that act as money transmitters can easily register with the Financial Crimes Enforcement Network (FinCEN) to obtain federal regulatory compliance.
But the fact remains that money transmission businesses still need to comply with the laws of 48 different states that each have their own enforcement rules.
It appears that the Bitcoin Voters PAC was quickly confronted with the same compliance problems that bitcoin-related businesses have been dealing with for some time.
Take, for example, the differing regulations for state limits on contributions to candidates provided by the National Conference of State Legislatures. That’s just a starting point in how much work must be done to properly regulate the financial matters of something like the Bitcoin Voters PAC.
Could bitcoin influence politics?
Ever since the USA’s housing bubble burst (causing a domino effect on the global economy) the political zeitgeist of America has changed dramatically.This can be seen in the following Gallup Poll chart. After 2008 most US citizens have increasingly identified themselves as independent voters with no party affiliation.
This data can also be attributed to the fact that libertarianism is on the rise in the United States, especially among young Americans.
Generally of the ilk that a sizeable government is inherently bad, this political ideal could be one of the key motivations behind the creation of distributed systems of money, like bitcoin.
Libertarians are often skeptical of the Federal Reserve, the central authority that prints and controls money circulation in the United States.
The libertarian movement’s largest icon, past presidential candidate Ron Paul, has long talked about putting an end to the Fed. It comes as no surprise, then, that there are plans to launch a Ron Paul cryptographic currency.
Decentralized currencies have been a favorite of libertarians ever since bitcoin hit the scene. Attend any bitcoin meetup and you’re likely to come across a libertarian who has believed in bitcoin’s decentralized properties from early on. In fact, many were early adopters before even those in the tech scene caught on.
Wrapping it up
Going forward, bitcoin could play a vital role in future election campaigns. For politicians, the currency may offer a key tool in campaign fundraising that can help them get elected.Interestingly enough, the Congressional Research Service recently published a report for members of Congress stating that bitcoin could undermine the US dollar. But if constituents give politicians bitcoin for campaign donations, it may influence this kind of thinking.
Politicians may even adopt a libertarian to attract the expanding population of self-identified independent voters.
After all, if it brings in the donations, why not? There are a number of people who are clearly libertarian, independently minded and possibly possess a lot of bitcoin.
It’s a smart demographic for political figures to target in order to raise some game-changing funds.
Politician image via Shutterstock
