California again allows crypto contributions to state and local political campaigns

by Arthur · July 26, 2022

California again allows crypto contributions to state and local political campaigns

California has lifted a 2018 ban on crypto donations to meet political goals

By Shashank Bhardwaj

Image: Shutterstock

California’s Fair Political Practices Commission (FPPC) lifted a ban on accepting Bitcoin donations on Thursday, allowing candidates for state and municipal offices to accept them again. The ban was introduced in 2018.

Under the new regulations, politicians are allowed to receive crypto donations as long as they convert them into US dollars immediately. Candidates must complete the transaction which will collect the name, address, occupation and employer for each donation via a registered crypto payment processor. Donations made in crypto are already allowed for federal office candidates.

In other fields, California has led the way in embracing crypto. In February, a proposal to allow crypto for government services was introduced in the state senate. The committee rejected the bill, but a new hearing was allowed. The hearing has not yet taken place. To align the state’s laws with President Joe Biden’s executive order on digital assets, the governor issued an executive order in May.

The FPPC considered three options for their new crypto policy. Keep the ban in place or treat cryptos as money with a donation cap of $100, as is the situation in many countries, were the first two choices.

There was also a third option, which proposed that crypto should be treated as tangible assets, such as goods and services, rather than considering it as money or financial inputs. This comes with the condition that it must comply with KYC protocols, and that within two business days it is transferred to fiat. The donation value will be determined by the crypto’s dollar exchange rate on the day of the transfer.

Due to perceived concerns with transparency and Know Your Customer (KYC), nine jurisdictions, including California, had banned political contributions made in crypto assets. The topic of contributions made in crypto was raised again when the commission issued a statement in March on the sale of non-fungible tokens (NFTs) for campaign fundraising.

The author is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash