The California Fair Political Practices Commission voted on Thursday to allow state campaigns to accept cryptocurrency donations, reversing a four-year ban on donations.
Since 2018, California was one of nine states not to allow cryptocurrency donations to campaigns. The FPPC initially banned donations due to concerns about tracking crypto donations and political transparency. While federal candidates were still allowed to donate, California remained steadfast.
However, cryptocurrencies, such as bitcoin and ethereum, have undergone many changes over the past four years and gained wide acceptance. As the cryptocurrency market now faces a more uncertain future with the fall in crypto prices over the past few months, the California legislature has proposed legislation allowing residents to pay for more things with the currency. The broader adoption paved the way for the FPPC’s decision on Thursday.
California is now one of 13 states, plus the District of Columbia, that has local rules allowing crypto donations. However, new California rules state that all crypto donations must be immediately converted to US currency after donations, with applicants legally required to maintain a record of each person’s name, address, occupation and employer. contributor. The new crypto donation rules will also go into effect within 60 days, meaning candidates can start receiving bitcoin donations by mid-September, just in time for the fall elections.
“The FPPC is always very cautious about these donations,” Greg Thornton, an accountant who has worked on several state campaigns, told The Globe on Friday. “They basically treat this like any cash gift, but with additional steps, like conversion. It also prevents campaigns from speculating on the currency, such as holding the crypto until it rises again. This bill stops all that.
“I’m not sure about the long-term viability of this. Crypto adoption was doing well until the start of this year. Now everyone is selling it, it seems, and people who used to chant that crypto is the future and things like “Hodl” are now very quiet. It is good to see the appearance of alternative types of donations, which are particularly easy to transfer, such as crypto-currencies. But we still have to keep an eye on it and make sure no one cheats the system. It’s still a relatively new thing, and we need to make sure it’s safe and sustainable for campaign donations. A fake donation here and it could turn into a scandal, especially if the name of the person who donated is not listed, which has been a big concern.
“But let’s just give more time too. The FPPC is playing it safe and so are we. Many donors, especially younger donors, might like the ease of giving this way, but in the end, it will be money anyway. It’s not the car you take, it’s ultimately the destination.
Donations from Crpyto are expected to flow to state campaigns over the next two months.