The Texas Ethics Commission proposed an exclusive framework for Cryptocurrency contributions yesterday, to further address and clarify the reporting requirements of political contributions made with cryptocurrencies like Bitcoin. The proposal mirrored the Federal Election Commission (FEC) and several other state commissions like the IRS and SEC’s treatment of cryptocurrency contributions and holdings as investments instead of currency. According to the new rule, authorities will be able to accept crypto payments. However, the decentralized currency will only be reported as in-kind contributions.
“The new rule permits candidates, officeholders, and political committees to accept cryptocurrency. It does it distinguish between any types of cryptocurrencies, like Bitcoin. The rule would require filers to report cryptocurrency as in-kind contributions. Campaigns would be required to liquidate any cryptocurrency before spending the proceeds; they would not be permitted to use cryptocurrency as a currency.”
Furthermore, the new rule if implemented will also incorporate the infamous issue of volatility in crypto by directing filers on how to report the value of cryptocurrency contributions. Filers will be required to report the value of any accepted cryptocurrency as the fair market value at the time of receipt. Nevertheless, the rule does not impose a liquidation deadline for digital currency funds, but it deems it necessary for filers to determine the legality of any accepted cryptocurrency contribution and obtain certain information from the contributor, including an affirmation that the contributor is not a foreign national.
Crypto Mom’s pro-crypto statements
While the US government remains divided on the crypto debate, more supporters are getting added to the pro-crypto adoption list. Earlier this week, at the Wall Street Journal’s Tech Live conference, crypto mom, Commissioner Hester Peirce came back to virtual currency’s rescue, suggesting the SEC begin working with crypto businesses in carving out a reasonable framework for the securities laws.
The Commissioner noted that it’s high time that the regulators accept the inevitably growing nature of the decentralized sphere and start working with crypto firms to decipher an improved policy framework, which in turn will lead to a better future for the nation’s financial markets.