Ban On Cryptocurrency Donations For Political Campaigns – Michigan’s Secretary of State announced the ban of cryptocurrencies which are being used in campaign donations, as reported in a letter published on 8th Nov. 2018.
William Baker, state legislature candidate from the office of Michigan State posed the question of how crypto donations have to be registered for political campaigns? He also asked how these crypto donations had to be used; and whether these virtual currency exchanges would act as the valid secondary depositories for storing of virtual currencies?
Baker, made an early inquiry about this issue after losing the recent elections. In response to Baker, the Michigan Department of State replied according to the Michigan Campaign Finance Act (MCFA) and the Administrative Procedures Act (APA) stating that cryptocurrencies are not the right way to receive donations.
The letter from Michigan’s Secretary of State has issued a clear regulation. It stated that according to MCFA all donations or contributions should be as money or something. Which has monetary value. Hence, donations made through Bitcoin or other altcoins are not valid due to the frequent change in their values.
“Cryptocurrency is not a mere transfer of controlled funds deposited or withdrawn through a financial institution. But rather is traded anonymously through an electronic platform. As with stocks and commodities, Bitcoins worth fluctuates daily. There is no way to ascertain the precise monetary value of one Bitcoin on any particular day.”
-The Secretary of State’s office letter stated.
Ban On Cryptocurrency Donations For Political Campaigns-T add further, due to the anonymous nature of donations through cryptocurrencies, they are not allowed under Michigan campaign finance laws. In which the law states that not a single candidate is allowed to accept anonymous donations. Especially as these anonymous contributions which have been received, have to be donated to a tax-exempt charitable organization.
Meanwhile, Michigan is not the first state in the country to make the decision to ban cryptocurrencies for political donations. In Sept California announced that it would not accept the digital assets for fund donations to candidates. But, it is allowed to receive cryptocurrency donations which are under $100 dollars and later these donations must be converted to cash.