The decision further legitimizes bitcoins.
On Thursday, the Federal Election Commission (FEC) unanimously approved giving bitcoin donations to political action committees (PACs). The decision marks one of the first official government rulings on the virtual currency.
The FEC concluded that PACs may both accept and purchase bitcoins, but bitcoins must be sold and deposited into a campaign depository before they may be spent. The FEC did not rule on whether PACs could then acquire goods and services with the bitcoins they receives as contributions.
According to The Washington Post, the FEC had deadlocked on a similar question in the fall, with the three Democratic appointees calling for more time to study the issue.
Of key concern at the time was whether bitcoins should be considered a “cash” or “in-kind” contribution. Congress has severely restricted cash campaign contributions, due to their untraceability and easy transferability. Candidates may only receive $100 in cash donations per contributor, per election. In-kind contributions are under no such restrictions.
In its advisory opinion request to the FEC, the Make Your Laws PAC had only sought to accept bitcoin donations in increments up to $100. FEC Vice Chair Anne Ravel cited this limitation as “material” to her approval in her statement following vote.
But FEC Chair Lee Goodman disagreed, arguing that the advisory opinion treats bitcoin donations as in-kind contributions — like silver dollars or works of art — meaning that the only limits that apply are the federal caps on all forms of accepted donations, $2,600 to a candidate per election and $5,000 to a political action committee.
“To me, the opinion that the commission approved today supports the right of bitcoin users to contribute as they would all other kind things of value,” Goodman told The Washington Post. “This advisory opinion in no way established the outer limit.”