US Colorado Aims to Legalize Cryptocurrency Political Donations

Bitcoin and other digital coins contributions will be subject to the same rules as fiat money backing.

by Marin Marinov
21 May • 3 min
In Regulation

US state of Colorado wants to legalize cryptocurrency donations for political campaigns, a proposal of Secretary of State Wayne Williams, published on the administration's website, reveals. Contributions with Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) or other virtual coins will be subject to the same rules as cash support.

The value of crypto donations will be calculated, based on the prices at the moment of transfer. Anonymous donations of more than USD 20 in crypto currency will not be allowed and if a campaign receives such backing, it should transfer the amount to a charity or the state budget. Any contribution above that limit should reveal name and address of the source. For individual cash donations the limit stands at USD 100. Wayne Williams has already put his proposal for public consultation.

Is Colorado a pioneer?

Suzanne Staiert, Colorado’s deputy secretary of state: “The FEC[Federal Election Commission] is doing it now. So we are just going along for the ride.”

However, Colorado's proposal differs from FEC decision that allowed Bitcoin contributions. In 2014, the Commission allowed Bitcoin contributions by defining them as “in-kind donations", meaning that these types of aid are noncash and subject to the rules of goods and services (e.g. equipment, help in event organization). It has strict accounting guidelines for BTC backing and put a cap of USD 100 for individuals that want to give Bitcoin compared to a USD 2700 limit in cash.

The Federal Election Commission is the body responsible for federal elections, House, Senate and Presidential races, and does not have authority regarding state elections (governors and state legislature). Therefore, Jared Polis (D-Boulder), US House Representative from Colorado state, was able to receive USD 2000 worth of Bitcoin in 2014.

US States and cryptocurrency donations

US states have a different approach regarding cryptocurrency contributions for political campaigns. New Hampshire was the pioneer by allowing such donations in 2014 while Kansas became the first US state that officially banned cryptocurrency in October 2017. Kansas state authorities claimed that virtual coins are “too secretive” and “worse than Russians”, a reference to the possible Russian meddling in the 2016 US Presidential elections. California, the most-populated US state, has issued warning about these types of contributions but not banning them.

US state of Missouri considers possible rules for cryptocurrency donations similar to Colorado proposal. Recently, Austin Petersen, a Missouri republican candidate for autumn midterm elections, accepted the largest ever single Bitcoin donation for federal election with BTC 24 that was worth USD 4500 at the time of transfer.