The state of California’s Fair Political Practices Commission (FPPC) has revoked a ban established in 2018 prohibiting cryptocurrency donations to state and local political campaigns. This will allow candidates to receive cryptocurrencies that they can use to fund their campaigns.
California lifts ban on crypto donations to political campaigns
California is among nine states that have banned the use of cryptocurrency in political campaigns due to issues with transparency and Know Your Customer (KYC) verification. The state has also regularly discussed the viability of crypto donations due to several limitations.
In March of this year, the issue of contributions within the cryptocurrency industry was again discussed. At the time, regulators were considering selling non-fungible tokens (NFTs) as part of campaign fundraising.
In May this year, the FPPC released a report looking at three options for policing the cryptocurrency industry. These policies included maintaining a ban on crypto donations for political campaigns or treating cryptocurrencies the same as cash where contributions were capped at $100 like in other states.
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The third option proposed by the FPPC was to treat cryptocurrencies the same as an in-kind contribution where goods and services are used instead of money. However, this would be done on the condition that the processor adopts a KYC protocol, and the contribution would be converted into fiat currency within two days.
The third option was the one that was approved Thursday. California is not the first state to accept crypto donations for local and political campaigns. California will join 12 other states that have allowed political donations using cryptocurrencies. This decision will be implemented within two months.
Crypto Regulations in California
Cryptocurrency adoption in the United States has increased significantly over the past year. California has been one of the leading states in the adoption of cryptocurrency. Earlier this year, the state Senate passed a bill allowing state government offices to make payments using cryptocurrencies.
However, this bill has not yet been approved. It was tabled after a community vote failed to approve it. However, he was given a re-audition, but that has yet to happen. Additionally, the state’s Governor, Gavin Newsom, wants to introduce crypto regulations.
In May, the governor issued an executive order that will harmonize regulations within the state and the executive order signed by President Joe Biden earlier this year regulating the digital asset market.
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