Contribute a Bitcoin: Virtual Currency Experiments in Campaign Finance

Photograph by Simon Dawson/Bloomberg

The Bitcoin Wallet smartphone app.

Bitcoin enthusiasts are developing their influence in Washington, as Bloomberg News reported today, and naturally that means starting some super-PACs.

The virtual currency is decentralized, automated and limited — qualities that appeal to entrepreneurs and fans of Ron Paul, the libertarian-leaning Texas Republican who ran for president in 2012.

In the past year, Bitcoin’s biggest backers formed Bitcoin Foundation, which wants to promote and protect the currency. The foundation has an employee in Washington and is being courted by professional lobbyists. Law firm Perkins Coie, through former Washington Mayor Adrian Fenty, is helping shape the currency’s government relations strategy.

Meanwhile, on the other side of the influence ledger, three Bitcoin-themed political committees have registered with the Federal Election Commission in just the past two months.

Coin Pac is set up as a traditional political committee that must adhere to campaign-finance limits and can give directly to candidates. It’ll accept dollars and Bitcoins, its founder Sean McGovern of Elgin, Illinois, said on a Bitcoin forum. The PAC’s goal, according to its website,  is to “promote virtual currency through public discourse.”

Last week, a super-PAC called Bitcoin Voters Political Action Committee set up shop. As with all super-PACs, it is legally permitted to accept unlimited sums of money from anyone so long as it does not coordinate with any candidates.

Right now, it’s not accepting anything.

“We’re more of a proof of concept as Washington wrestles with the Bitcoin model,” said founder Richard Wagner of  Middleton, Wisconsin. He supplied the FEC with a Bitcoin receiving web address, rather than a bank account, but said his group isn’t yet prepared to take contributions of any variety.

“We’re waiting to see what the FEC does, because we’d prefer to conduct all of our business in Bitcoins,” he said. “That includes things like buying online ads.”

The FEC hasn’t explicitly prohibited Bitcoins as campaign contributions. It appears that candidates and political committees can treat them as in-kind contributions. There’s no policy for a political committee that wants to spend in Bitcoins.

A third group, Bitcoin Super Pac, was founded in November by an associate of Ron Paul activist Nick Spanos, who recently opened a Bitcoin education center in New York City. Spanos said that group will soon dissolve.

Yet Spanos sees campaign contributions as a clear path to Washington’s heart. “Everyone should send Bitcoin donations to their politicians,” he said. “Then they’ll figure everything out overnight.”

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