Bitcoin donations to political campaigns get green light in California
Bitcoin and other crypto donations to political campaigns have been banned in California since 2018. Mainly, concerns about grants being used to circumvent contribution limits and bans were one of the main reasons the ban was implemented. Alongside, foreign entities contributing to campaigns was another facet of fear highlighted at the time.
However, a few months ago, a state regulator – the Fair Political Practices Commission – had scheduled a discussion to consider draft amendments to the same. And now, in the latest development, the commission voted Thursday to approve new rules, greenlighting donations of digital currencies like Bitcoin.
This means that candidates for state and local offices in California will soon be able to accept crypto campaign donations.
The “Bitcoin to fiat conversion” catch
However, crypto cannot be kept by the candidates. It must be converted to fiat. This essentially rules out the odds of the donated amount abnormally amplifying or shrinking due to market volatility. A recent report from the Los Angeles Times confirmed,
“The rules state that candidates can accept cryptocurrency donations if they immediately convert the digital currency into US dollars.”
The LA Times report further revealed that candidates must use a registered crypto processor to handle transactions. The same is the case with noting each contributor’s name, address, occupation and employer.
California’s new rules will reportedly take effect within two months. Notably, California had been one of nine states to ban crypto contributions. According to a recent report, 12 states, along with Washington DC, allow cryptocurrency contributions in some form. The aforementioned difference highlights how the regulations remain widely varied in the United States.
In the case of California, candidates running for federal office are already allowed to accept cryptocurrency donations. Aarika Rhodes, an elementary school teacher, running to represent California’s 32nd congressional district, for example, had revealed that her campaign had officially adopted the Bitcoin Lightning Network for campaign donations last November. She openly brought out the accessibility that the revolutionary technology provided and tweeted,
“If you want to see me in Congress fighting to keep Bitcoin innovation here in the US, donate to my campaign. I’m running a grassroots movement. Every Satoshi can make a difference.”
