Digital currencies are moving to campaigns, but government rules vary technology

By ANDREW RURAL AND STEVE LEBLAN – Associated Press

For congressional candidate Shrina Qurani, cryptocurrency is not just the future of money, it is a transformative technology that can revolutionize campaign finance and attract a new generation of voters.

She is among the vanguards of candidates courting digital currency campaigns such as bitcoin.

“We are a campaign that speaks to a large part of the population, especially younger people,” said the American-born daughter of Indian immigrants, who is in the primary vote Tuesday as she seeks the Democratic nomination for a seat in Congress east of Los Angelis.

The Koran’s raid on digital currency to help fund her campaign would not be possible if she ran for the California legislature or other state office. While the federal government allows political donations in cryptocurrency, California did not do so after banning the practice four years ago.

The difference underscores not only the growing popularity of cryptocurrencies, but also how regulation varies greatly in the United States.

People also read …

Some states, including Arkansas and North Carolina, also do not allow cryptocurrency donations to state competitions under existing campaign finance laws. Others have followed federal rules for candidates in Congress and allow donations with disclosure requirements and contribution ceilings, usually set at $ 100. Other states, including Hawaii, Idaho and South Dakota, have not adopted specific policies on digital currency donations.

Digital currencies offer an alternative that does not depend on banks. Instead, transactions are validated and recorded in a decentralized digital ledger called a blockchain.

Perian Boring, founder and CEO of the Digital Commerce Chamber, a trade association representing the blockchain industry, likened the use of cryptocurrency in politics to former Presidents Barack Obama using smartphone technology and Donald Trump using social media.

“Blockchain technology can increase participation in the political process in a very positive way,” Boring said, noting that this is especially true for younger people and members of minority groups who may be skeptical of traditional monetary methods.

Critics say the potential drawback is the lack of transparency – the uncertainty of who is ultimately behind the donation.

Beth Rothman, director of the money and ethics program for the non-partisan monitoring group Common Cause, worries that traceability is more difficult with cryptocurrency.

“When financing the campaign, you want disclosure. You need back-up information, “Rothman said. “I know (cryptocurrency) is sexy and signals to people that you are a new candidate, but there must be a better way to do it than to compromise other parts of the campaign finance system.

Timothy Masad, a former chairman of the US Futures Trading Commission, is also concerned about the revelations.

“The danger is that I think it’s still a sector that doesn’t have enough regulation, especially on the risk of illegal activity and money laundering,” said Masad, currently a research fellow at Harvard University’s Kennedy School of Management.

Donations of cryptocurrencies have been allowed in federal competitions for years after the Federal Election Commission approved their use in a 2014 opinion.

The commission said political committees should evaluate contributions in digital currency based on market value at the time the donation is received. Applicants must also return contributions that come from prohibited sources or exceed the contribution limits.

During the 2017-18 election cycle, cryptocurrency donations reported to the Federal Election Commission reached just over $ 1.2 million. They have reached about $ 500,000 so far in the current cycle, which is months before the general election.

Shortly after the Federal Election Commission authorized donations of cryptocurrencies, then-US Democrat Jared Polis began asking for them. Now the governor of Colorado, Polis is seeking such contributions as he runs for re-election, with donations in cryptocurrency limited to $ 100.

“Through campaigns accepting cryptocurrency donations, we can demonstrate the security, affordability and ability to use cryptocurrency in a variety of transactions, as well as help send the message that Colorado is home to innovation,” said Amber Miller, a spokeswoman for the campaign. Police.

As the popularity of digital currencies grows, some countries that ban cryptocurrency contributions are overestimating.

Jay Virenga, a spokesman for the California Commission for Fair Political Practice, said the agency would review its ban later this year.

“The commission is always striving to keep up and keep pace with the changing universe of political activity,” Virenga said.

Oregon is one of the most innovative states in the election, being the first to introduce postal voting. But in 2019, Oregon banned candidates running a state office campaign from accepting cryptocurrency donations. This was despite the fact that former Secretary of State Dennis Richardson, a Republican, said they should be seen as “a new and innovative way to expand participation.”

Two months after Richardson died of cancer in 2019, the Oregon Legislature closed the door on such donations. As the Senate prepares to vote, Democrat Sen. Jeff Golden, Democrat, said: “One of the widely shared goals of this legislative session is to increase the transparency of money in politics, and cryptocurrency tends to go the other way.”

This feeling is not unanimous. One of the few U.S. lawmakers to oppose a ban on cryptocurrency donations was Republican Bill Post. He said many people in the legislature simply do not understand it.

“I don’t want (us) to sound like a bunch of old bastards here,” he said. “Let’s face the 21st century.”

Jesse Grushak, 30, is one of those voters who loves cryptocurrencies and who supports their use for political contributions. The New Yorker donated to the campaign of Democrat Matt West, a fellow cryptocurrency enthusiast who had a failed bid for a seat in the Oregon Congress this year.

“At this point in American politics, anyone who is pro-crypto is someone I want to support,” Grushak said.

The 29-year-old Qurani said her embrace of the cryptocurrency was more than just a chance to show off her technical data. It is also a way to reach those for whom digital alternatives to the US dollar are becoming the legal tender of choice.

She downplayed concerns about donor privacy, saying her campaign turned crypto donations into dollars and pursued the same information – name, address, employer, profession – that would be for any donor.

“We really make sure we can represent the American people who are involved with new types of digital currency,” she said.

Associated Press journalist Camille Faset in Auckland, California, and AP writer Audrey McAvoy in Honolulu; Stephen Groves in Sioux Falls, South Dakota; and Keith Riedler of Boyce, Idaho, contributed to this report.

Copyright 2022 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Leave a Comment

Your email address will not be published.