Cryptocurrency for political campaign contributions will now be allowed in California after the state Commission on Political Fair Practices lifted the ban on Friday.
The FPPC has voted to remove the four-year cap on Bitcoin contributions. In 2018, California was one of nine states to ban the practice, according to an FPPC staff report.
Under the latest ruling, California joins 12 states to allow cryptocurrency donations.
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Cryptocurrency to cash conversion is part of the deal
Rules requiring campaigns to turn digital devices into cash as soon as they receive them. According to the Associated Press report, campaigns must use a “registered cryptocurrency processor” to obtain standard donor information.
According to the report of the staff, certain measures are needed to prevent money laundering and not limit the contributions of political parties.
The report states that the new applicable guidelines will be set out within 60 days.
Image: Orange County Breeze
Cryptocurrencies do not depend on banks. Instead, blockchain technology is used to record digital transactions. State and federal regulations require the collection of names, addresses, professions, and employers of all donors.
California Leads in Bitcoin Adoption
In other contexts, California has been a pioneer in bitcoin adoption. In February, legislation was proposed in the State Senate to allow payments for government services in cryptocurrencies.
This measure did not pass the procedural vote, but was admitted to the revision, which has not yet taken place. In May, Gov. Gavin Newsom issued an executive order to align the state’s rules with the Digital Assets Executive Order issued by U.S. President Joe Biden.
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On March 9, Biden signed an EO outlining the risks of exploiting the potential benefits of digital currency assets and the technology behind them.
The main donor of the presidential campaign
Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, was one of Biden’s top sponsors in the 2020 presidential campaign. The billionaire CEO’s 2024 campaign spending is estimated to be $1 billion.
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The California Department of Financial Protection and Innovation, which oversees state-licensed financial institutions, said last week it was investigating whether virtual asset companies that froze withdrawals and transfers were violating 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, embraced the technology warmly, while others called for its use; for example, China has stopped using cryptocurrencies altogether.
Featured image from Money, chart from TradingView.com