For congressional candidate Shrina Kurani, cryptocurrency is not just the future of money, it is a transformative technology that could revolutionize campaign finance and appeal to a new generation of voters.
She is part of a vanguard of candidates seeking campaign contributions in digital currencies such as Bitcoin.
“We are a campaign that appeals to a large segment of the population, especially young people,” said the US-born daughter of Indian immigrants, who is contesting Tuesday’s primaries as she seeks the Democratic nomination for a congressional seat east of Los Angeles. †
Kurani’s quest for digital currencies to help fund her campaign wouldn’t be possible if she ran for the California legislature or any other state office. While the federal governmentCalifornia doesn’t, as it banned the practice four years ago.
The difference underlines not only the growing popularity of cryptocurrencies, but also how the regulations in the United States vary widely.
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, usually set at $100. Still other states, including Hawaii, Idaho, and South Dakota, do not have specific policies regarding digital currency donations.
Digital currencies offer an alternative that does not rely on banks. Instead, transactions are validated and recorded in a decentralized digital ledger called the†
Perianne Boring, founder and CEO of the Chamber of Digital 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 using social media.
“Blockchain technology can increase participation in the political process in very positive ways,” Boring said, noting that this is especially true for young people and members of minority groups who are skeptical of traditional monetary methods.
Critics say the potential downside is the lack of transparency — not knowing who is ultimately behind the donation.
Beth Rotman, director of the Money in Politics and Ethics program for the impartial watchdog group Common Cause, is concerned that traceability is more difficult with cryptocurrency.
“In campaign finance, you want disclosure. You need backup information,” Rotman said. “I know (cryptocurrency) is sexy and signals to people that you’re a new candidate, but there’s got to be a better way to do that than jeopardize other parts of the campaign finance system.”
Timothy Massad, former chairman of the US Commodity Futures Trading Commission, is also concerned about the revelations.
“The danger is that, in my view, this is still an industry where there is a lack of regulation, especially with regard to the risk of illegal activity and money laundering,” said Massad, a current researcher at the Kennedy School of Government at Harvard University. †
Cryptocurrency donations have been allowed in federal races for years, after the Federal Election Commission approved its use in a 2014 advisory.
The committee said political committees should rate digital currency contributions based on market value at the time the donation is received. Applicants must also return contributions from prohibited sources or that exceed contribution limits.
During the 2017-2018 election cycle, cryptocurrency donations reported to the Federal Election Commission totaled just over $1.2 million. They’ve hit about $500,000 so far in the current cycle, which is months before the general election.
Shortly after the Federal Election Commission approved cryptocurrency donations, then-US Representative Jared Polis, a Democrat, started asking. Now governor of Colorado, Polis is seeking similar contributions as he runs for reelection, with cryptocurrency donations capped at $100.
“Through campaigns that accept cryptocurrency donations, we can demonstrate the security, accessibility and desirability of using crypto in different types of transactions, and also help send the message that Colorado is a hotbed of innovation,” said Amber Miller, spokeswoman for Polis campaign.
As the popularity of digital currencies increases, some states banning contributions to cryptocurrencies are being reassessed.
Jay Wierenga, spokesman for the California Fair Political Practices Commission, said the agency would review the ban later this year.
“The committee always tries to keep up with and stay ahead of the changing universe around political activity,” Wierenga said.
Oregon is one of the most innovative states when it comes to elections as it was the first to institute postal voting. But in 2019, Oregon banned candidates campaigning for office in the state from accepting cryptocurrency donations. This is despite the fact that former Secretary of State Dennis Richardson, a Republican, said they should be seen as “a new and innovative way to broaden participation”.
Two months after Richardson died of cancer in 2019, the Oregon legislature closed the door to such donations. As the Senate prepared to vote, Senator Jeff Golden, a Democrat, said: “One of the widely shared goals of this legislative session is to increase the transparency of money in politics, and cryptocurrency tends to move in the opposite direction.” to go”.
This feeling is not unanimous. One of the few state lawmakers to oppose the cryptocurrency donation ban was Republican Representative Bill Post. He said many people in the Legislative Assembly just don’t understand him.
“I don’t want (us) here looking like a bunch of old fuddy duddies,” he said. “Let’s catch up to the 21st century.
Jesse Grushack, 30, is one of those voters who loves cryptocurrencies and supports their use for political contributions. The New Yorker donated to the campaign of Democrat Matt West, another cryptocurrency enthusiast who failed to run for an Oregon congressional seat this year.
“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 just an opportunity to show off his technical credentials. It’s also a way to reach those for whom digital alternatives to US dollars are becoming their legal tender of choice.
Downplaying concerns about donor secrecy, she says her campaign converts crypto donations into dollars and seeks the same information — name, address, employer, occupation — as for any donor.
“We really care about being able to represent Americans participating with new types of digital currencies,” she said.