Colorado Planning to Allow Bitcoin and Crypto Donations for Political Campaigns
Cryptocurrency has always been a quasi-political instrument; whose fundamental design and purpose is to disrupt centralized control, potentially allowing people to subvert their own governments through its use. And using cryptocurrency can be a political statement in and of itself. A declaration that people no longer needs to operate under the purview of the State when it comes to their own financial matters.
Now, in Colorado, there is a plan to give cryptocurrency even more of a political weight. According to reports from the Denver Post, Colorado could soon allow citizens to make donations to political campaigns in the form of bitcoin and a handful of other cryptocurrencies. On May 16th, the Secretary of State Wayne Williams drafted and submitted the proposal outlining the rules for using cryptocurrency as a campaign donation.
While on the surface this seems like a definite step in the right direction toward a more normalized function of digital currency, there could be unintended consequences for not only the people who donate crypto but also the campaigns that accept donations in bitcoin. The US Federal Election Commission (FEC) has already ruled that campaigns are allowed to accept cryptocurrency as in-kind donations while giving the campaign 10 days limit to complete the deposit into their account.
The issue with using cryptocurrency as a donation instrument at this time is the same reason why people have been using cryptocurrency less as a currency and more as a long-term investment that you sit on and HODL. the exchange rate between cryptocurrencies like bitcoin and the USD fluctuate so drastically that a donation which was intended to be a certain amount can vary drastically depending on when the person converts the said donation back into fiat.
This poses significant problems for campaigns because they are only allowed to accept a certain amount of money per donation and if it exceeds an upper limit then it has to be returned. And with the lack of a legal framework in the State’s legislature to identify and handle cryptocurrencies, being able to donate to campaigns in bitcoin is something that still seems to function fully only in theory until more guidelines can be flushed out and the price of bitcoin stabilizes.