Thursday, June 20, 2019

Canada’s Electoral Committee Considers Accepting Cryptocurrencies as Donations

Canada may soon start accepting Bitcoin and other altcoins as a contribution to its upcoming general elections. This is because Elections Canada, the body behind the country’s political fundraising platform recently published an “Interpretation Note”. They are seeking for the guidance of political parties in deciding if cryptocurrencies should be used to receive donations.

Canada Says the Use of Cryptocurrencies is on the Rise

First of all, the publication states that interest in virtual currencies is on the rise.  Queries have therefore been made on how these digital assets can be taken advantage to make contributions during elections. Also, the rules that will guide the transaction of such assets in regards to political matters have been outlined.

The Interpretation Note also classifies cryptocurrencies as non-monetary – likening it to money and property. This means that while these assets can be used to make purchases as is the case of money, they cannot be transferred directly into a bank account. However, they will have to be first converted to fiat currency before being sent.

Virtual Currencies May be Used for Political Contributions

Based on this classification, assumptions can be made that a new policy which will enable contributions to be made using digital currencies may be underway. The reason is, money and property are currently used to make contributions during a campaign. That notwithstanding, the final decision lies with the platform who has given political parties up to January 21 to state their opinion regarding the matter.

On the other hand, a limitation has been noted to the use of digital assets, and that is the anonymity of payments. This has been attributed to the fact that it will be difficult to ascertain who made such donations. This goes contrary to the contribution rules that states that donations over $20 have to be validated and reported to the Canada Elections Act (CEA).

The Use of Separate a Wallet and Storing Data to Track Sender

Nevertheless, a possible solution has been outlined, and that is by creating a separate wallet to receive these funds. When transactions higher than $20 are to be made, political entities will have to request for the name, address, and email address of the donator. Finally, the transaction number on the Blockchain will have to be stored.

The North American country may be the first to make this consideration given that what we’ve seen so far, is the Blockchain technology being used to conduct general elections. This was the case of West Virginia, who in November successfully used an application based on the DLT to conduct its general elections.

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