Associated Press: Digital currencies flow to campaigns, but state rules vary

For congressional candidate Shrina Kurani, cryptocurrency is not only the future of money, it’s a transformative technology that could revolutionize campaign funding and attract a new generation of voters.

She is among a vanguard of candidates courting campaign contributions in digital currencies such as Bitcoin. …

Kurani’s foray into digital currency to help fund her campaign would not be possible if she were running for the California Legislature or some other office within the state. While the federal government allows political donations in cryptocurrency, California does not, having banned the practice four years ago.

The difference underscores not just the rising popularity of cryptocurrencies but also how regulation varies widely across the U.S. …

Critics say the potential downside is lack of transparency — not knowing who is ultimately behind the donation.

Beth Rotman, director of the Money in Politics and Ethics Program for the nonpartisan watchdog group Common Cause, worries that traceability is more difficult with cryptocurrency.

“In campaign finance, you want disclosure. You need backup information,” Rotman said. “I know (cryptocurrency) is sexy and signals to people that you’re a hip new candidate, but there has to be a better way to do it than compromise the other parts of the campaign finance system.”