On Thursday, May 8, 2014, the Federal Election Commission ruled that Bitcoin could be accepted as in-kind donations to political groups. The proposal was a response to Make Your Own Laws PAC’s (MYL) advisory option request, AO 2014-02. This ruling follows a deadlock vote of 3-3, on a similar proposal, in November 2013.
What Does This Mean For Bitcoin’s Future?
Well, political donations made in Bitcoin are now considered to be similar to donations of stocks, bonds, or other items of value. Generally that would be considered to have a limit of $2600 per individual to a political candidate, and $5000 to a PAC, however it is unclear if the limits are the same in this ruling. As MYL only requested approval to accept Bitcoin donations valued at up to $100, and the proposal mentioned the $100 limit multiple times.
FEC Commissioner Ellen L Weintraub put out this comment on Twitter:
“In today’s narrow AO, FEC approved #bitcoin contribs up to $100, w/affirmation that donors not foreign.”
She then followed it with:
“FEC needs to accommodate innovation while protecting transparency and guarding against foreign donations tainting our political system.”
However, as the precedent for in-kind donations does set the previously mentioned caps, it is likely that most political groups will argue that the $2600 and $5000 caps apply, rather than $100. Chairman of the FEC, Lee Goodman, stated that while this approval was for a specific request from MYL mentioning $100, that no cap was set in the approval, and that Bitcoin should be subject to the pre-established in-kind donation rules. It is very likely that this ruling will not be the last we hear on the matter from the FEC.
This ruling is much-needed good news for Bitcoin, and other digital currencies, as it gives lawmakers further incentive to work with, rather than against, the fledgling industry. Also, as other regulatory groups are working toward finding out how Bitcoin should fit within their own realms of jurisdiction, the FEC’s positive ruling could serve as a guiding light to direct regulatory officials, and lawmakers, toward acceptance, rather than rejection. Between this approval, and recent guidelines, released by the IRS, regarding how Bitcoin is to be treated for taxation purposes, it seems as if the Bitcoin community may finally have the regulatory answers that it has been waiting for. Lets hope the Bitcoin price responds in kind.