California has finally lifted its ban on sending and receiving donations in cryptocurrencies for political campaigns, leaving the likes of Arkansas and North Carolina.
According to a Los Angeles Times report, the Fair Political Practices Commission (FPPC) had a change of heart after outrightly implementing the ban in 2018, stating that virtual assets are challenging to track and can result in a lack of political transparency.
FPPC Passes New Crypto Law
According to the report, the commission signed a rule of approval on Thursday, enabling state and local political candidates to start receiving donations in bitcoin.
A few months ago, the body opened a “pre-notice discussion“ concerning using cryptocurrencies for political purposes in its May 2022 schedule.
Under the new law, aspirants can receive crypto donations to push their political campaigns. However, the candidates have been mandated to convert the digital assets into fiat upon receipt immediately.
As per the report, the law will take effect within 60 days, noting that recipients of the contributions must use a registered crypto processor with a Know-Your-Customer (KYC) basic security functionality to capture the sender’s personal information such as name, address, occupation, and their employers.
Meanwhile, the FPPC’s previous stance on using cryptocurrency for political support did not stop the government from exploring other use cases of the assets.
In May, Governor Gavin Newsom issued an executive order on digital assets, establishing a clear roadmap for regulatory and consumer protection rights. The order also outlined various measures the government could use to benefit from the crypto and blockchain industry.
Not the First
California, the largest economy in the U.S., is not the first American state to accept bitcoin contributions for political campaigns. Other notable states, such as Washington D.C., allow crypto donations. In 2021, the National Republican Campaign Committee (NRCC) also started accepting crypto contributions after revealing a donor had requested it.
The Republican House campaign division noted that the crypto donation will be sponsored by BitPay, a crypto trading platform, and will be converted to the U.S. dollar before landing on the party’s account.
Coinfomania also reported in the same year that the then political aspirant in Illinois, Holly Kim, the Lake County Treasurer, received $3 worth of Litecoin (LTC) from Mark Tan.
As stated in the report, the supporter said he was only testing the feasibility of the donation system to ensure it’s hitch-free with the promise to send more crypto.
