In an age where foreign entities influence voting with shell corporations, cryptocurrency is slowly making its way in state elections. This makes it tough for regulators and officials who are responsible for maintaining integrity of the elections. They have one more factor to consider, i.e. digital funding.
According to the Center for Public Integrity, there are at least 20 candidates who have been requesting or received cryptocurrencies for their campaigns. Three candidates out of these were contesting from a state which has banned cryptocurrency funding.
While the confusion of cryptocurrency funding is widespread, there are no uniform rules in place.
“Cryptocurrency is like the wild west in terms of regulation,” said Joseph Argiro, a cryptocurrency analyst with ICO Alert. “This is the new way of raising money. It’s no surprise that politicians are jumping on board.”
Ever since its inception in 2010, it has been the currency for illicit activities like money laundering and fraud. Since cryptocurrency owners can use pseudonyms for international transfers, the source of some transactions remain unknown. This hinders political transparency.
New Tools, New Problems
While many political experts believe that Bitcoin hinders transparency in state elections, majority of experts suggest that Bitcoin could actually help in creating a transparent system. With Bitcoin, officials can track the money using latest tools and technology.
However, according to Joseph Argiro, unless regulators decide on certain digital currencies, the process won’t be that smooth. With more than 2000 different digital coins, it would be a challenge to ensure that no external force is impacting the voting process. In fact, the Center for Public Integrity found it’s nearly impossible to identify actual cryptocurrency contributions in some state campaign finance reports.
“It’s definitely important for the states to put in political surveillance on these types of campaign contributions,” Argiro said. “But the industry is so new that the tools are still being developed to facilitate that surveillance. And that’s why people are fearful.”
Platform For Cryptocurrency Funding
In order to make things easier, most candidates are using BitPay. It helps user to accept cryptocurrency funding. To accept payments, the donors need to create an account with their name and address. Unfortunately, this doesn’t help in the transparency, as anyone can use fake credentials and sign up as a donor.
When it comes to tracking digital funding at state level, the process becomes tougher. There is no organization, which tracks funding for political campaigns. This in turn makes it difficult to know just how much money has made its way in the state and local elections.
BitPay donations have doubled in the last year, to over $26 million from 743 donors, according to BitPay spokesperson Jan Jahosky. However, most states have recently put a ban on cryptocurrency funding or has set a limit for that.
With California banning Bitcoin funding for elections, it’ll be interesting to see if other states follow in its footsteps. However, it is time the regulating officials accepted Bitcoin for better election transparency.
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