The U.S. Federal Election Committee ruled on Thursday that politicians would be allowed to take bitcoin as legal political contributions and donations, but not anonymously, Reuters reported.
Political action committees will be able to accept donations in bitcoins up to an individual limit of $100 for each election cycle, the Federal Election Commission, which enforces U.S. campaign finance laws, said.
In a unanimous vote, the FEC also ruled that politicians could also purchase bitcoins, which must then be treated like other in-kind donations such as stocks and shares.
This means that groups and individuals who accept the currency must convert it into U.S. dollars, and deposit those dollars into a campaign account, rather than spending the bitcoin directly, the Guardian reported.
The FEC stressed that using bitcoins was not approved to purchase campaign goods and services. Rather, it approved the request by the Make Your Law committee to accept individual bitcoin donations.
"The Commission concludes that MYL may accept bitcoins," the report said. "The Commission also concludes that MYL may purchase bitcoins, but MYL must sell the bitcoins it purchases and deposit the proceeds into its campaign depository before spending those funds. The Commission could not approve a response by the required four affirmative votes as to whether MYL may acquire goods and services with bitcoins it receives as contributions."
Despite the anonymity of bitcoins, contributors will be required to list their names, addresses and occupations, employers, and affirm that they own the bitcoins they are donating.
"Bitcoin, the most popular digital currency, is not backed by any government or central bank, and its value can swing dramatically based on demand," Reuters reported. "Users can transfer bitcoins to each other online and store the currency in digital ‘wallets.'"
Under federal election law, the FEC concluded that bitcoins were "money or anything of value." But it acknowledged that "government agencies, courts and others are grappling" with whether virtual currencies should be treated as money.
Since most virtual currency services do not have the proper controls in place to restrict money laundering, the U.S. Justice Department warned last year that it could be used to dodge U.S. laws, Reuters reported.
