Posts Tagged ‘Bitcoin’

Bitcoin Hires Lobbyists

Thursday, July 17th, 2014 by Vbhotla

BITCOIN’S PUBLIC PROFILE has grown significantly in the past year, and like any burgeoning cause or industry, it has lobbyists. The Wall Street Journal reported last week that the Bitcoin Foundation, a nonprofit with the goal of standardizing, protecting, and promoting Bitcoin, has hired Thorsen French Advocacy to represent the Foundation on Capitol Hill.

The Bitcoin Foundation is by no means the first group to lobby on issues related to the digital currency. The Hill notes that Falcon Global Capital, a Bitcoin investment group, hired lobbying firm Thompson Hine in May, and also registered an in-house lobbyist. MasterCard, meanwhile, has Peck Madigan Jones monitoring or working on Bitcoin issues.

Bitcoin has steadily gained visibility in the past year, with the FEC approving the cryptocurrency for PAC contributions, although the PAC must convert Bitcoins into dollars before depositing them into a campaign account. But it has also faced significant public mistrust following the disappearance of $460 million in Bitcoin from Mt. Gox, formerly the world’s largest Bitcoin exchange.

While Bitcoin still has a long way to go to reach mainstream acceptance among lawmakers and the general public, the Bitcoin Foundation’s lobbying hire should do much to advance the currency’s profile on Capitol Hill. It remains to be seen whether it will ever become the borderless, non-political, and widely trusted currency that its proponents hope for.

FEC Weighs in on Bitcoin

Friday, November 8th, 2013 by Geoffrey Lyons

ATTORNEYS AT THE Federal Election Commission released an advisory opinion yesterday approving Bitcoin, an electronic currency, as a legitimate form of in-kind contribution.  The draft opinion is a direct response to a request made in August by the Conservative Action Fund (CAF), which sought approval for the use of bitcoins in political fundraising.  CAF essentially wanted to know two things: firstly, “whether it may accept Bitcoins as contributions from individuals otherwise lawfully able to contribute,” and, secondly, “whether CAF may then itself contribute, sell, or directly spend these Bitcoins.”

The FEC has responded with a yes and a no.  Yes, bitcoins may be accepted as a form of contribution; but no, they may not be spent in turn.  In the attorneys’ own words:

The Commission concludes that CAF may accept Bitcoins as in-kind contributions under valuation, reporting, and disbursement procedures, as described below. 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.

One can learn about the arguments for and against the use of Bitcoin in politics here.

Bitcoin in Politics: 3 Arguments For and Against

Wednesday, September 18th, 2013 by Geoffrey Lyons

IN JUST THE past few years, the degree to which American politics has become awash with cash has well exceeded the absurdity of Monopoly, a game in which large sums of money are thrown about so carelessly that one almost whimsically wishes it were real.  But things haven’t become so farcical that Monopoly money is actually used in the political arena.  Or have they?

The Conservative Action Fund (CAF) has requested that the Federal Election Commission (FEC) accept Bitcoin, an open source “cryptocurrency,” as a legitimate form of political contribution.  The commission has until the end of next month to reply with an advisory opinion.

It’s helpful to know the case for and against potential approval by the FEC. The CAF rests its request on three main arguments:

  1. Bitcoin is a form of money;  it’s exchanged as an imaginary thing of value, similar in concept to any dollar, euro, pound sterling, etc.
  2. Bitcoin’s popularity is soaring, i.e., it’s legitimacy is supported by its growing use.  The total value of all Bitcoins in circulation is currently over $1.3 billion.
  3. There’s an appetite for Bitcoins in the political arena.  Parties and candidates want to accept them and they want to spend them.  In fact, the Libertarian Party already does both.

These are undoubtedly compelling arguments, and will likely receive unyielding approval from libertarians, most of whom disapprove of the FEC’s very existence.  Yet regardless of where the support emanates, there’s force behind these two words: why not?  Why not permit the use of Bitcoin if there’s a case for its legitimacy and clear evidence of its popularity?

The most detailed arguments will potentially come from the advisory opinion itself, but a few have been floating in cyberspace, articulated by such sources as USA Today, Bloomberg, and Fox.  Here are three:

  1. Bitcoin is not accepted as legal tender in any nation.  It’s even banned in some corners of the world.  Why should the FEC recognize an underground currency?
  2. Bitcoin’s value against the U.S. dollar is prone to extreme fluctuation.  The CAF even recognizes this in its proposal, and links to a graph illustrating Bitcoins’ crashes.  The USA Today asks “How should a political committee handle a Bitcoin contribution of $199 that jumps in value to $205 by the time the deposit hits the committee’s campaign account?”
  3. It’s unclear whether a donation of Bitcoins should be treated as an in-kind or monetary contribution.  This dilemma matters immensely, which the CAF admits.  If a Bitcoin donation were treated as an in-kind contribution, its value would be equal to its “usual and normal value on the date it is received.”  If it were treated as a monetary contribution, its value would be “readily apparent.”  Which of these two nearly opposite designations is correct is certainly not readily apparent.

Clearly there is sound logic to support both sides of the argument.  If the FEC is ready to employ nothing but sound logic in its response, then spectators like your humble blogger are in for an interesting and fruitful dialogue.  But one can only hope for such an elevated discussion; the more likely outcome is politics as usual.