Kansas is considering guardrails on cryptocurrency donations to political campaigns, a currently unregulated form of donation in the state. Cryptocurrency accounted for nearly half of all corporate money spent on election campaigns, according to CNBC. But direct donations to campaigns require legal considerations. “We have zero crypto campaign contribution laws in place today, so we’re inviting some chaos and tyranny,” Kansas Sen. Craig Bowser, R-Holton, told the Senate Federal and State Affairs Committee.
Bowser, who introduced the bill, modeled the legislation off of bills passed in Arizona, California, Colorado, Georgia, Ohio, Tennessee and Washington. Michigan, North Carolina and Oregon have outright bans on cryptocurrency donations to political campaigns, and the remaining states don’t have explicit positions on crypto campaign donations. The Federal Elections Commission has allowed cryptocurrency as a form of legitimate campaign donations since 2014. Bowser’s bill would require any crypto-based donation to be made by a U.S.-based payment processor that is registered with FinCEN and uses a Know Your Customer protocol to identify the donor’s information.
Campaigns would be required to convert the cryptocurrency into U.S. dollars within three days of the transaction, and mark any administrative fees for processing as a campaign expenditure. Lawmakers on the committee asked about how donations work given the volatile valuations of cryptocurrencies. Within three days, a donation could go from within campaign contribution limits to exceeding it, meaning candidates could be required to issue partial refunds. “I think as a candidate, I would probably not ever accept this or have that ability, because there are times that I’m not on top of my phone for a period of three days,” said Sen. Marci Francisco, D-Lawrence. “This is putting a lot on our treasurers.”
Francisco said she’d be interested in banning crypto currency donations to campaigns. State lawmakers have considered updating campaign finance law to address cryptocurrencies. In 2023, the House Committee on Elections recommended the state ban any cryptocurrencies from being used as campaign contributions, but it never got a vote on the House floor.
Kansas is evaluating guardrails on cryptocurrency donations to political campaigns, a form of donation that remains unregulated in the state. Crypto donations accounted for a significant share of corporate spending on elections, according to CNBC, highlighting the regulatory stakes involved. The Federal Elections Commission has allowed cryptocurrency as a valid campaign contribution since 2014, framing the debate around how these contributions should be handled in practice.
Kansas Sen. Craig Bowser, R-Holton, introduced a bill modeled after statutes in several states, arguing that the lack of rules invites chaos. The measure would require crypto-based donations to be processed by a U.S.-based payment processor registered with FinCEN and using a Know Your Customer protocol to verify donor information. Campaigns would be obligated to convert the cryptocurrency into U.S. dollars within three days of the transaction and to classify any processing fees as campaign expenditures.
Lawmakers on the committee questioned how donations would function given the volatility of cryptocurrencies. The bill notes that a donation could, within three days, move from within campaign contribution limits to exceeding them, potentially necessitating partial refunds. “We have zero crypto campaign contribution laws in place today, so we’re inviting some chaos and tyranny,” Bowser told the committee. Sen. Marci Francisco, D-Lawrence, expressed concerns, suggesting she would prefer a ban on crypto donations and noting the burden on treasurers to manage rapid changes in value.
State lawmakers have long discussed updating campaign finance laws to address cryptocurrencies. In 2023, the House Committee on Elections recommended banning cryptocurrencies from being used as campaign contributions, though the proposal did not advance to a vote on the House floor.
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