California again allows crypto contributions to the state and local political campaigns
California has overturned a 2018 ban imposed on crypto donations for meeting political ends
By Shashank Bhardwaj
California's Fair Political Practices Commission (FPPC) removed a ban on accepting Bitcoin donations on Thursday, allowing candidates for state and municipal offices to accept them once again. The ban was imposed in 2018.
According to the new regulations, politicians are permitted to receive crypto donations as long as they convert them right away into US dollars. Candidates must conduct the transaction that will gather the name, address, occupation, and employer of each donation via a registered crypto payments processor. Donations made in crypto are already permitted for federal office candidates.
In other fields, California has led the way in embracing crypto. In February, a proposal to allow crypto for state government services was made in the state Senate. The committee rejected the bill, but a rehearing was allowed. The hearing hasn't happened yet. In order to align state 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 like money with a $100 donation cap, as is the situation in many countries, were the first two choices.
There was a third option as well, which suggested that crypto should be treated as tangible assets, like goods and services, rather than considering it as money or financial inputs. This comes with the stipulation that it must adhere to the KYC protocols and also that within two business days, it is transmuted to fiat. The donation value would be determined by the cryptos’ dollar exchange rate on the transfer day.
Due to perceived concerns with transparency and Know Your Customer (KYC), nine jurisdictions, including California, had outlawed political contributions made in crypto assets. The subject of contributions made in crypto was brought up once more when the commission issued a statement in March regarding the sale of non-fungible tokens (NFTs) for campaign fundraising.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash