Government Technology: States Split on Cryptocurrency’s Place in Political Races
“The big thing with currency and crypto is just how incredibly volatile it is and how much its value can fluctuate,” said Stephen Spaulding, senior counsel for public policy and government affairs for nonpartisan watchdog group Common Cause. “If you take a step back and think about why we regulate the raising and spending of money to influence elections, ultimately, it’s to prohibit corruption and the appearance of corruption that can come with large contributions of cash or other things of value.”
Outside of that, Spaulding said, the lack of regulations surrounding these types of donations is also concerning.
“People are familiar with the two largest cryptocurrencies, Bitcoin and Ethereum,” he added. “But there are all sorts of cryptocurrencies that are coming on the market that are not entirely regulated, raising a lot of questions about whether campaign finance law, which is in place to curb corruption, can keep pace with changing cryptocurrency practices.”
As for transparency and traceability, he said the amount of money being contributed may not be as important as who is making a contribution.
“It’s not so much about the amount of money in politics; it’s where it comes from and what contributors want in return,” Spaulding added. “We’d love to encourage a system that relies on small-donor contributions because there’s less of a chance the contributions from many small-dollar donors will lead to corruption or the appearance of corruption, versus the system awash in large contributions.”