Cryptocurrencies and Political Finance

Cryptocurrencies are a new form of digital money or asset that could drastically change the flow of resources around the world.

As their number keeps on growing, also do the questions about their implications on the financing of politics and integrity more broadly. Does their anonymity, volatility and a lack of oversight create a potential for abuse? Or does the technology behind cryptocurrencies—blockchain—create a breeding ground for innovations in the anti-corruption realm?

This discussion paper presents some of the basic notions behind cryptocurrencies and their regulation, especially targeting their use in the financing of political parties and election campaigns. The author pays special attention to how cryptocurrencies can allow foreign contributions and anonymous donations to enter politics unnoticed, while analyzing their capacity to improve political finance reporting, disclosure and oversight.