In politics, every penny counts to secure a candidate's position in office. Bitcoin's low cost of acceptance, accompanied by increasing clarity from regulators over its role in campaigns, is making it a more appealing choice for accepting donations.
"Politicians, like everyone else dependent on accepting payments or donations, are sensitive to costs," said Matt Philips, who works with several Republican candidates for New Hampshire state office and Congress. "Bitcoin is much lower cost than credit card or even e-checks."
Bitcoin also has somewhat political roots that appeal to a certain constituency. The digital currency, which does not rely on the mainstream payments infrastructure, can enable donations to organizations when companies like Visa, MasterCard and even PayPal have cut ties.
The appeal of virtual currency as an alternative payment method is part of the candidate's message, Philips said. For example, New Hampshire gubernatorial candidate Andrew Hemingway, one of the candidates Philips aids, has proposed allowing the state of New Hampshire to accept Bitcoin as payment for taxes, fines and fees.
"The campaign message of most of the 'liberty' candidates is that government regulation and control of the money supply has stifled the economy and robbed everyone of much of the value of the dollar," Philips said. Hemingway's office did not return a request for comment by deadline.
Kevin Avard, a Republican candidate for New Hampshire State Senate, said the lack of card fees makes Bitcoin a more appealing option to donors.
"With Bitcoin, my supporters know that 100% of their donations are actually going to the cause, instead of involving standard credit card fees," Avard said. "This makes it an obvious choice for both me and my supporters."
Democrats are also using Bitcoin. Christine Gagnier, a digital rights lawyer who is running to represent a Congressional district near Los Angeles, recently began accepting Bitcoin donations. Gagnier did not return a request for commend by deadline.
"Bitcoin is apolitical. Because it's open, it appeals to the independent lean of [libertarians]. But crypto currency also democratizes the financial system, which appeals to those [left-leaning voters] who see the system as controlled by large corporations," said Jeremy Almond, CEO of PayStand, which recently introduced a virtual currency-friendly online payments platform.
Regulatory clarity is also increasing candidates' comfort with accepting virtual currency. The Federal Election Commission in late 2013 proposed limited use of Bitcoin in campaigns, and in May 2014 issued an advisory opinion stating that political action committees and campaigns could accept Bitcoin donations, but could not accept funds from anonymous donors.
The FEC's ruling provides more clarity than existed in 2013, when the earliest Bitcoin political fundraising adopters were unsure if it was legal to accept virtual currency for political donations.
Under the FEC's opinion, campaign treasurers bear the responsibility for the legality of each donation, and for now virtual-currency donations are limited to $100.
"We have seen technology have a dramatic effect on election cycles, such as the Internet or mobile or social media," Almond said. "And now digital currency is the next piece. It presents an opportunity to get payments in a lower cost way."
Many new payment technologies, including mobile and digital wallets, also aim to win appeal by promising lower costs than credit and debit card payments.
Politicians who accept Bitcoin donations may benefit more from the message they convey than the money they save, said Jordan McKee, a senior analyst at 451 Research.
The firm's research indicates that only 2% of adults have used Bitcoin, while 38% have never heard of it. "But again, the value of accepting Bitcoin for campaign donations is much more around marketing than actual fundraising," McKee said. "It promotes a forward-thinking and tech savvy image."