But individual donations should not exceed $100 per election.
After months of debate, the US Federal Election Commission (FEC) has unanimously approved donation of bitcoins for political campaigns.
In a huge vote of confidence for cryptocurrency, the FEC said political action committees can accept and purchase bitcoins.
The FEC, which enforces campaign finance laws in the country, voted 6-0 in favour of the move, but it has limited individual contribution to $100 for each election.
It stipulated few conditions for donation in cryptocurrency: prohibiting anonymous contributions, and prescribing scrutiny of donations by treasurers for "evidence of illegality."
The regulator effected the changes in the law following a request for guidance by Make Your Laws (MYL), a campaigning group.
"The Commission also concludes that MYL may purchase bitcoins, but MYL must sell the bitcoins it purchases and deposit the proceeds into its campaign depository before spending those funds," The FCC said.
"The Commission could not approve a response by the required four affirmative votes as to whether MYL may acquire goods and services with bitcoins it receives as contributions," it added.
The guidelines could be an advisory opinion and may not be law.
The use of bitcoins is yet to be allowed by the US Justice Department which had earlier warned that that bitcoins could bypass laws in the country.
Last month, underground Bitcoin vault service provider Xapo has unveiled a new credit card service which could take the cryptocurrency mainstream.
The Xapo Debit Card claims to be the first Bitcoin debit card in the world, and will allow users to use bitcoins like cash.