For Congresswoman Shrina Kurani, cryptocurrency is not just the future of money, it is a transformative technology that could revolutionize campaign funding and attract a new generation of voters.
It is at the forefront of candidates cutting campaign contributions in digital currencies like Bitcoin.
“We are a campaign targeting a large section of the population, especially younger people,” said the American daughter of Indian immigrants, who is in the primary vote on Tuesday as she seeks the Democratic nomination for to a seat in Congress east of Los Angeles.
Kurani’s foray into digital currency to help fund his campaign would not be possible if he applied for the California legislature or some other state office. While the federal government allows political donations in cryptocurrencyNot California, having banned the practice four years ago.
The difference underscores not only the growing popularity of cryptocurrencies, but also how regulation varies widely in the U.S.
Some states, including Arkansas and North Carolina, also do not allow cryptocurrency donations in state races under existing campaign finance laws. Others have followed federal rules for congressional candidates and allow donations with disclosure requirements and contribution limits, typically set at $ 100. Still 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 blockchain.
Perianne Boring, founder and CEO of the Digital Chamber of Commerce, a trade association representing the blockchain industry, compared the use of cryptocurrency in politics to former President Barack Obama using smartphone technology. and former President Donald Trump taking advantage of 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 possible downside is a lack of transparency, not knowing who is behind the donation.
Beth Rotman, director of the Money in Politics and Ethics Program for the non-partisan control group Common Cause, is concerned that traceability will be more difficult with cryptocurrency.
“In campaign funding, you want outreach. You need security information,” Rotman said. “I know (cryptocurrency) is sexy and tells people you’re a new fashion candidate, but there has to be a better way to do that than to compromise the other parts of the campaign funding system.”
Timothy Massad, a former chairman of the U.S. Commodity Futures Trading Commission, is also concerned about the revelations.
“The danger is that this is still, in my opinion, a sector where there is not enough regulation, especially on the risk of illicit activity and money laundering,” said Massad, currently a researcher at the Kennedy School of Government. from Harvard University.
Cryptocurrency donations have been allowed in federal races for years, after the Federal Electoral Commission authorized its use in a 2014 opinion.
The commission said political committees should value digital currency contributions based on market value at the time of receiving the donation. Applicants must also return contributions that come from prohibited sources or exceed contribution limits.
During the 2017-18 election cycle, cryptocurrency donations reported to the Federal Electoral Commission amounted to just over $ 1.2 million. They have reached about $ 500,000 so far in the current cycle, with months to go before the general election.
Shortly after the Federal Electoral Commission allowed cryptocurrency donations, then-Democrat U.S. Rep. Jared Polis began soliciting them. Now governor of Colorado, Polis is seeking similar contributions as he stands for re-election, with $ 100 cryptocurrency donations.
“Through campaigns that accept cryptocurrency donations, we can show security, accessibility and the opportunity to use cryptocurrency in different types of transactions and also help send the message that Colorado is a home of innovation,” he said. say Amber Miller, spokeswoman for the Polis campaign.
As the popularity of digital currencies grows, some states banning cryptocurrency contributions are being re-evaluated.
Jay Wierenga, a spokesman for the California Fair Trade Practices Commission, said the agency will review its ban later this year.
“The commission is always looking to keep up to date and move forward in the changing universe around political activity,” Wierenga said.
Oregon is one of the most innovative states in the election, as it was the first to institute postal voting. But in 2019, Oregon banned candidates campaigning for offices within the state from accepting cryptocurrency donations. That was despite former Republican Secretary of State Dennis Richardson saying 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 these donations. As the Senate prepares to vote, Democratic State Sen. Jeff Golden 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 in the opposite direction.” .
This feeling is not unanimous. One of the few state lawmakers opposed to banning cryptocurrency donations was Republican Rep. Bill Post. He said a lot of people in the Legislature just didn’t get it.
“I don’t want (us) to sound like a bunch of old idiots here,” he said. “Let’s get to the 21st century.”
Jesse Grushack, 30, is one of those cryptocurrency-loving voters who supports using them for political contributions. The New Yorker made a donation to the campaign of Democrat Matt West, a fellow cryptocurrency enthusiast who this year had a failed bid for a seat in the Oregon Congress.
“At this point in American politics, anyone who is pro-crypto is someone I want to support,” Grushack said.
Kurani, 29, said his embrace of cryptocurrency is more than an opportunity to showcase his technological credentials. It’s also a way to reach out to those for whom digital alternatives to the U.S. dollar are becoming their preferred legal tender.
He lowers concerns about donor secrecy by saying that his campaign turns cryptocurrency donations into dollars and looks for the same information (name, address, employer, occupation) that he would do for any donor.
“We’re really making sure we can represent the Americans who are participating with new types of digital currency,” he said.
- In:
- United States Congress
- Cryptocurrency
- California
- Elections
- Jared Polis
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