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    Louisiana Bill Seeks to Establish Rules for Cryptocurrency Political Contributions Louisiana Bill Seeks to Establish Rules for Cryptocurrency Politic Donations 

    The Louisiana state legislature is currently considering a bill that would allow crypto donations to political campaigns. Republican Party Representative Mark Wright sponsored the bill. It aims to provide a legal framework that allows cryptocurrency donations to political parties or political leaders.

    Crypto Contribution to Political Campaigns

    House Bill No. 170 intends to “allow a candidate to receive campaign contributions in the form of cryptocurrency” by amending and reenacting existing laws. It asks the house to establish the procedures for donations, use, reporting and other relevant matters in order to accept such donations. 

    The bill proposes to define cryptocurrency. It reads that such an asset “means a digital or virtual currency that is not issued by any central authority, is designed to function as a medium of exchange and uses encryption technology to regulate the generation of units of currency, to verify fund transfers, and to prevent counterfeiting.”

    Although the bill allows candidates, office-bearers, as well as political committees, to accept cryptocurrency contributions it will require them to be converted into fiat currency for expenditure.

    “A candidate, officeholder, or political committee must sell cryptocurrency and deposit the proceeds from the sale into an account before making an expenditure from a cryptocurrency contribution,” the bill reads. Instead of money, the bill seeks to consider them “in-kind” contributions. 

    Bill Seeks Maintenance of Records

    The bill clarifies the law in relation to donations, valuations and expenditures. It also makes the recipients responsible for ensuring the legality of the donation. To this end, the beneficiary should maintain necessary records of the contributor’s full name, physical address, current employer, and an affirmation that the contributor is the owner of the donated digital asset.

    “The valuation of in-kind contributions or expenditures shall be the estimated fair market value thereof at the time received and expended. The valuation of cryptocurrency contributions shall be the fair market value thereof at the time the contribution is received,” the proposed bill says.

    Legislature Commends BTC, Satoshi

    In April last year, the Louisiana legislature passed a resolution that commended bitcoin and its creator, Satoshi Nakamoto, for their “contribution to economic security.”

    Taking note of bitcoin “becoming the first decentralized trillion-dollar asset,” the House Resolution brought by Representative Wright invited “the state and local governments to consider ways that could help them benefit from the increased use of this new technology.” 

    Individual politicians in many state legislatures have shown keen interest over the past few years in bitcoin adoption. But, US regulators are increasingly calling for increased regulation of this asset class.

    In one such development from last week, Federal Reserve Chairman Jerome Powell reminded Congress of the need for regulation for the crypto industry. 

    Asked if Russia could bypass the international sanctions by using digital assets, Powell said it “underscored the need for Congressional action on digital finance including cryptocurrencies.” He was testifying before the House Financial Services Committee on the state of the economy. 

     

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