Bitcoin and Politics
Elections Canada wants to form an opinion on cryptocurrencies. To do so, they have opened channels for political bodies to voice their opinion. These channels will remain open until January 21st.
Primarily, the question at hand deals with the handling of cryptocurrencies as political donations. The following is an excerpt from their recently released statement on the matter, outlining points of clarification.
“With interest in cryptocurrencies on the rise, political entities have requested guidance on accepting contributions and conducting other transactions in bitcoin or altcoins. This interpretation note seeks to answer the following questions: Are cryptocurrencies monetary or non-monetary for the purpose of the Canada Elections Act (“CEA”)? How do the contribution rules apply? Can political entities buy property or services directly with cryptocurrencies?”
One of the key points for accepting donations in the form of cryptocurrencies, is to know who is sending it. It is noted that for anonymous donations over $20, the asset must be remitted to Elections Canada.
The purpose of these actions are to ensure that there are no influences from outside of Canadian borders acting upon the elections. By enforcing the known origins of donations, Elections Canada is able to ensure that only Canadians are taking part.
As it stands, the Canada Revenue Agency, along with most other entities, consider cryptocurrencies to be non-monetary in nature. By viewing them in such a light, cryptocurrencies need to be treated with different rules. The note, released by Elections Canada, delves into these rules to bring clarification to the situation.
To close out their note, Elections Canada makes it clear that the burden of compliance is on parties receiving cryptocurrencies.
They indicate as much by stating, “Political entities that wish to conduct transactions using cryptocurrencies must ensure that they follow the CEA’s requirements for contributions and reporting, keeping in mind the rules on non-monetary contributions. Most importantly, this means knowing who is making contributions and using a two-step process for identification and acceptance of contributions over $20 so that ineligible contributions do not enter the political system. As well, different political entities must be aware of how the rules apply to them when they wish to buy, sell, transfer and hold cryptocurrencies.”
Friendly in Canada
Canada has shown a consistently welcoming demeanor toward digital assets. While various countries grapple with their stances, Canadians have marched forward. To date, Canada has seen the adoption of digital assets at both government and public levels. There are even Bitcoin ETFs – a long fought point of contention south of the border.
An Indecisive U.S.
While the U.S. holds on as a major player within the world of blockchain, its grasp is viewed by many as tenuous, at best. Much of this doubt stems from the lack of regulatory clarity given by oversight bodies such as the SEC.
In addition to this, there is a clear divide in Bitcoin acceptance going from state to state. While some states allow taxes to be paid in cryptocurrencies, others have no such plans.
Multiple politicians have found themselves in the very situation that Elections Canada is trying to avoid. Last year, Senate candidate, Austin Petersen, received over $130,000 USD in cryptocurrency donations. Due to current regulations, he was forced to return the funding.