Rep. Steve Stockman, R-Texas, who is mounting an insurgent bid against Sen. John Cornyn, R-Texas, in the 2014 Texas Republican Senate primary, is now accepting the virtual currency known as Bitcoin for campaign donations, Business Insider reports.
Stockman, a fervent opponent of what he sees as the Federal Reserve’s decision to print money to stimulate the economy, has embraced Bitcoin as an alternative to the dollar, which he warns will become devalued as the central bank continues printing money.
There are currently about 12 million Bitcoins in circulation. They were created in 2008 by an anonymous developer, and they can be transferred online without ever passing through a central bank. Those transactions are viewable in an online database, but they do not provide any information about the identity of the transacting parties. That degree of anonymity has been greeted with enthusiasm by proponents and wariness by regulators.
Stockman, who was in New York City on New Year’s Eve to participate in the launch event for the NYC Bitcoin Center, falls squarely in the former camp.
“I really think digital currency’s more about freedom,” he explained in a YouTube video alongside Bitcoin Center founder Nick Spanos, a real estate developer. “Because all the time people are trying to get in your pocket, trying to do different things to control you. And if you have your own wealth, and control your own wealth, it’s about freedom, it’s not about anything other than that really. Freedom to choose what you do with your money, and freedom to keep your money without people influencing it by printing money or through regulation.”
He framed the digital currency as a safeguard against the loose monetary policy being pursued by the Federal Reserve. “You currently have a body that’s printing money for the purpose of stimulus, which is an artificial market,” he said. “Right now they’re printing so much, there’s going to be supply and demand, and one day, you’re printing so much, the money in your currency will become worthless, and that’s why it’s important to have gold and other things that are static that no one can fluctuate at a rapid rate. And that’s why it’s real good to have Bitcoin – it’s a fixed amount of currency at a fixed rate, so they’re good for the markets.”
Despite Stockman’s evident enthusiasm, the Federal Election Commission has not yet approved the digital currency as a source of campaign donations, voicing concern about whether Bitcoin donations could provide the same level of disclosure seen with traditional currency.
In November, the FEC punted on the question of whether Bitcoins could be used in political donations, saying they’d like to further study concerns about transparency.
“Bitcoins do raise some very interesting questions about whether disclosure can be adequately done," FEC Chairwoman Ellen L. Weintraub said in November, according to the Los Angeles Times. "And I'm not prejudging the answer to that."
Weintraub also voiced concerns about the volatility of the Bitcoin’s value, which has shot up dramatically over the last year, according to some estimates. “We have seen committees burned when investing in volatile entities,” she explained. “We've seen it with campaigns that invest in the stock market, and the stocks went down, and all of sudden they didn't have the resources that they thought they had."
Republicans on the FEC had lobbied in favor of allowing candidates to accept Bitcoin donations. ““I think we’ve been a little bit distracted by the novelty of bitcoins,” said Vice Chairman Lee Goodman, according to the Washington Post. “Although they represent a unique and new type of asset, they are an asset.”