Digital currencies can play an interesting and disruptive role in the current financial system, and political donations are no exception to that statement. Several states already allow for politicians to accept digital currency donations [up to a certain limit]. The Tennessee Senate recently drafted a bill which would allow for political digital currency donations in their state as well, and to make it even better, the bill passed on First Consideration.
Tennessee Senate Bill 674
Similar to cash donations for a political campaign, digital currency donations can only be accepted up to a certain limit. These types of payments can only be allowed by adding the term” digital currency” in between the existing terms of “payment” and “gift”. While this may seem to be rather futile, it is important for the future of Bitcoin and other digital currencies to have these bills drafted up using traditional techniques.
The Tennessee Senate Bill 674 would allow a candidate or political campaign committee to accept contributions in the form of digital currencies. Every digital currency contribution will be considered a monetary contribution with the value of the specific digital currency being the market value of the digital currency at the time of receiving the contribution.
As most of you are well aware, digital currencies are prone to volatile price swings, which means a contribution of that kind could become more or less valuable over time. In the event of the value increasing, the political candidate or campaign committee will be required to to report this increase in the form of an interest on any statement filed pursuant to § 2-10-105.
Unfortunately, there is also a downside to using digital currencies for supporting a political candidate. All candidates or political campaign committees are required to sell any digital currency and deposit the proceedings from these sales into a campaign account before spending the funds. This means we will not see any political candidates holding digital currency donations in the form they came in unfortunately, but at least the name of the currency will be on their mind.
BitPay To Process Digital Currency Donations?
Even though Tennessee Senate Bill 674 references to “digital currencies” instead of just “Bitcoin”, we all know ) more than likely – Bitcoin will be the only form of digital currency donation accepted by [most]political candidates. However, it would be rather fun and unique to see a candidate go out on a limb by accepting Litecoin or Dogecoin at some point in time.
Assuming -for the sake of argument – that only Bitcoin donations will be accepted during political campaigns, BitPay seems to be the perfect candidate to process these donations. After all, the BitPay website has its own dedicated section about “Bitcoin for Political Donations”, including the company’s FEC and Campaign Finance Laws compliance.
One of the strengths of Bitpay’s bitcoin payment processing platform is the “Zero Bitcoin Liability” for the person accepting this popular digital currency. BitPay lets you convert any incoming transaction to fiat currency automatically, and they will even make daily deposits to your bank account – assuming there is funds coming in on a daily basis.