Canada’s elections agency, Elections Canada, has invited views on how to handle the use of cryptocurrencies such as bitcoin in political fundraising.
According to iPolitics, Elections Canada has requested political parties to submit their opinions on the matter as the body prepares for elections in the next few months. Political parties have until January 21 to present their comments.
At the same time, the electoral body has issued an interpretation note that offers guidance to political entities on accepting cryptocurrency contributions and conducting transactions using the same. Per Elections Canada, this was done at the request of the political class:
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? The note also clarifies reporting requirements for buying, selling, transferring and holding cryptocurrencies.
The interpretation note may, however, be updated once Elections Canada receives submissions from political parties and other political entities.
Among the questions that the interpretation note addresses include how varying amounts of crypto contributions should be handled. For instance, in what promises to make contributions made using privacy coins such as Zcash and Monero not very ideal, cryptocurrency donations of more than $200 will require political parties to report the name and the address of the contributor in the financial returns.
Elections Canada has set the cap on anonymous cryptocurrency donations at $20. If a political entity receives more than that amount passively, they are required to remit the commercial value of the donation by check to Elections Canada.
The interpretation note also states that individuals running for office are not allowed to purchase property or services directly using crypto. The same applies to registered political parties who must liquidate their digital assets first and then deposit the proceeds into a bank account prior to making the purchase as part of their election-related expenses.
However, if the purchase is not related to elections, then a registered political party can purchase property and services directly using crypto.
Elections Canada has every reason to be proactive, as the Bank of Canada mid last year estimated that bitcoin ownership in the North American country had risen by 72% since 2016. The study revealed that at the time, 5% of Canadians owned bitcoin, up from a figure of 2.9% in 2016.
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Last modified: May 20, 2020 12:59 PM