The Kansas House of Representatives is mulling a bill that will change laws on political campaign donations involving digital currencies.
Introduced by the House Elections Committee, the proposed legislation seeks to prevent people from making digital currency donations greater than $100 to political campaigns in both primary and general elections. Digital currency donations below the threshold must be converted into US dollars immediately and deposited into the campaign account, according to the bill.
All digital asset donations must be made through a US-domiciled exchange that fully complies with established Know Your Customer (KYC) rules. Additionally, the bill requires the full names and addresses of donors and a statement that they own the digital assets.
The law appears to preclude donations by foreigners in Kansas electoral processes given the requirement of “an affirmation by the taxpayer that he is not a foreign citizen.
“The value of a cryptocurrency contribution is the fair market value of the cryptocurrency at the time the payment processor gains possession of the contribution,” the bill reads. “A campaign must not spend in the form of cryptocurrency or hold cryptocurrency as a campaign asset.”
The bill is expected to become law after its publication in the statute book and after easing the legislative hurdles of multiple readings, one vote, and the consent of the state governor.
Digital assets and elections have always been sensitive issues in US politics, with the Kansas Governmental Ethics Commission declaring that BTC donations were too stealthy to be allowed in the electoral process.
Digital currencies and elections
Despite the criticism received from critics, digital assets are becoming part of US campaign funding in recent years. In 2018, California imposed a ban on digital currency donations, but after nearly three years, the state’s Fair Political Practices Commission (FPPC) lifted the ban.
The FPPC evaluated three options for treating digital currencies, ultimately opting to treat them as a service rather than funds. At least 12 states in the US have approved digital currency donations for political campaigns, with industry executives like Sam Bankman-Fried donating millions of dollars to both Democratic and Republican campaigns.
A report from research firm CLVR said 60% of Americans supported using digital currencies for campaign donations under current fiat donation rules.
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