Why is Rand Paul accepting bitcoin donations?
Thursday 09 April 2015
Rand Paul, the Libertarian Republican candidate for the 2016 US presidential election, is accepting bitcoins for his campaign funding. Given the rocky road that bitcoin has navigated on its rise to prominence in the US, this is a remarkable development - but perhaps not such a surprising one in the end.
The first reason is that Paul is a Libertarian and a supporter of the Tea Party movement. He wants less government - a lot less - and believes that interference by the government, not least in the money supply, causes more problems than it solves. One of his big campaign promises is to audit the Federal Reserve, allowing Congress to comment on its decisions on monetary policy (something its chair, Janet Yellen, does not like at all). ‘The Fed currently operates under a cloak of secrecy and it has gone on for too long. The American people have a right to know what the Federal Reserve is doing with our nation's money supply,’ he explained in a statement. Six years ago his father, the former Congressman Ron Paul, published a book entitled ‘End the Fed’. As a decentralised currency outside the existing financial structures - and control of the Fed - bitcoin would hold a natural appeal to a man like Paul.
Rand Paul. Not a fan of big government.
Secondly, bitcoin is rising to prominence and respectability in the US, but it’s been a long journey. Bitcoin is still most associated in the popular press with the Silk Road bust and trial that recently saw Ross Ulbricht convicted and facing a life sentence. People think it’s primarily used for illegal activities, whilst at the same time recent legislation has brought it out of the shadows. Its legality has been established, but there’s still an aura of danger and darkness about it. Put simply, it’s controversial. It’s a great way to generate some funds, to raise awareness about an alternative currency and economic movement that’s right up Paul’s street, and to create a few headlines.
Thirdly, voters are disaffected, and particularly younger ones. The move to accept bitcoin appeals to a younger, tech-savvy generation, demonstrating that Paul is interested in and understands the fast-changing social landscape and the promise of these new technologies. He’s engaged with the idea of bitcoin in the past, first expressing interest but skepticism, but later admitting that it showed more promise. Last year he suggested pegging a cryptocurrency to ‘a basket of 10 big retailers… You could have a basket of stocks, and have some exchangeability. I'm wondering if that's the next permutation.’ It’s a concept straight out of Hayek.
To be clear, this isn’t a direct appeal to bitcoiners and crypto-enthusiasts - there aren’t enough to make a difference to his campaign. It's not really about bitcoin itself. But it does send out a strong message about Paul’s beliefs, and it shows he’s prepared to nail his colours to the mast - or, to use a better metaphor, to put his money where his mouth is. And that can only be a good thing for virtual currency in the States.
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