Does Bitcoin Have a Future in Politics?By and
Representative Steve Stockman (R-Tex.) is no stranger to provocative proposals. He authored one bill to repeal a federal ban on carrying firearms in school zones and one declaring that human life exists from fertilization. Now, in his long-shot bid for the U.S. Senate, Stockman has turned his sights to campaign finance by offering to take donations in bitcoins.
This comes as sweet harmony to those who think the controversial cyber currency represents a blow to the federal banking system they loathe, a cause never more at home than on Stockman’s turf. It was in Texas that former congressman and presidential candidate Ron Paul launched his assault on the U.S. money system. Almost a dozen Texas lawmakers lined up last year to cosponsor the “Sound Dollar Act,” a bill by Kevin Brady, a state representative, that would require the U.S. Federal Reserve to keep prices stable by monitoring a clutch of assets, including gold. (The private website GovTrack.us gives the bill a 1 percent chance of passing.) And while a handful of companies such as dating website OKCupid have announced plans to accept bitcoins, doubts about bitcoins’ long-term stability run deep.
The Federal Election Commission hasn’t decided whether they’re a proper funding tool or not. The commission in November deadlocked on the issue, with three Democrats on the six-member panel voting against a proposal to treat bitcoins as an “in-kind” contribution similar to stocks and bonds. The commissioners “also discussed the possibility of developing an interim policy,” according to a summary of the meeting. FEC spokeswoman Judith Ingram declined to comment.
Stockman isn’t dettered. “I really think digital currency is more about freedom,” he says of the virtual currency in a Dec. 31 YouTube video. Speaking outside the newly minted Bitcoin Center near Wall Street, Stockman continues, “All the time people are trying to get into 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.”
The anonymous nature of bitcoin highlights anew the quandary of tracing who exactly is funding political campaigns. And Mark Williams, who teaches finance at Boston University, is skeptical for other reasons. “If bitcoin is adopted, it will create financial instability in the economy, decline in [gross domestic product], and drop in overall commerce,” he says.
Volatility is the number one concern, said Williams, who points to China’s announcement last month that it would not accept bitcoins: “Within 48 hours,” he notes, “its value dropped by 50 percent.” The virtual currency has since recovered, but the fact that Stockman would “endorse a currency that can move by 20 or 30 percent in a given day” shows him to be irresponsible, Williams says.
He accuses the Senate candidate of showboating—not the first time Stockman has faced the allegation. His campaign has issued a bumper sticker that reads: “If babies had guns they wouldn’t be aborted,” the Washington Post reported. Stockman’s website promises to send “one of my Obama barf bags” for a $10 donation, and on a campaign Twitter feed the congressman has opined that “the best gun lubricant around” is “liberal tears.” Stockman spokesman Donny Ferguson did not respond to an e-mail seeking comment.
Stockman, who served in Congress in the 1990s and was elected again in 2012, surprised analysts who thought he’d keep his House seat when he filed papers in December, just minutes before the deadline, to challenge Senate incumbent John Cornyn in the Republican primary. One poll has had Stockman down by 44 points.
As for where his campaign might spend those bitcoins, most early adopters of the virtual currency, such as online gaming company Zynga, are of little obvious value to a political candidate. His best bet might be Overstock.com, the online seller of everything from furniture to electronics, which has said it will accept bitcoins by mid-year.
To make that bit of campaign-finance history, though, Stockman will have to survive the March primary.