Cryptocurrency for political campaign contributions will now be allowed in California, after a ban was lifted by the state’s Fair Political Practices Commission on Friday.
The FPPC voted to lift a four-year restriction on bitcoin contributions. In 2018, California was one of nine states that specifically banned the practice, according to an FPPC staff report.
With the latest ruling, California joins 12 states in specifically allowing cryptocurrency donations.
Suggested Reading | Crypto Retail Demand Is Improving, Says JPMorgan – Coast Is Clear?
Crypto-to-cash conversion is part of the deal
The rules require campaigns to turn digital currencies into cash as soon as they receive them. According to an Associated Press report, campaigns must use a “registered cryptocurrency processor” to obtain standard donor information.
Based on a staff report, certain measures are necessary to prevent money laundering and the refusal to limit the contributions of political parties.
The newly applied guidelines would be established within 60 days, the report said.
Image: Orange County Breeze
Cryptocurrencies are independent of banks. Instead, blockchain technology is used to record transactions digitally. State and federal regulations mandate the collection of the names, addresses, occupations and employers of all donors.
California Leads in Bitcoin Adoption
In other contexts, California has been a pioneer in bitcoin acceptance. In February, legislation was proposed in the state Senate to allow cryptocurrency payments for government services.
This measure failed a procedural vote, but it was allowed to be reconsidered, which has not yet taken place. In May, Governor Gavin Newsom issued an Executive Order to reconcile state rules with the Digital Assets Executive Order issued by US President Joe Biden.
Crypto total market cap at $98 billion on the daily chart | Source: TradingView.com
On March 9, Biden signed an EO outlining the risks of exploiting the potential benefits of digital currency assets and their underlying technologies.
Top Presidential Campaign Donor
Sam Bankman-Fried, chief executive of crypto exchange FTX, was one of Biden’s top donors for the 2020 presidential campaign. Estimates put the billionaire CEO’s campaign spending in 2024 at $1 billion.
California’s Department of Financial Protection and Innovation, which oversees state-licensed financial institutions, said last week it would investigate whether virtual asset companies that have frozen withdrawals and transfers broke the law.
Cryptocurrency remains a hotly debated topic, with skeptics claiming it is a market craze and nothing more than a get-rich-quick scheme.
Interestingly, some leaders, including the president of El Salvador, the mayor of New York and the mayor of Miami, have warmly embraced the technology, while others have urged that it be harnessed; for example, China has avoided the use of cryptography altogether.
Featured image from Money, chart from TradingView.com