Bitcoin Donations For Political Campaigns Are Now Prohibited in California

Regulatory watchdogs in California have ruled that individuals who intend running for public offices in the state can no longer accept donations made in cryptocurrencies.


Regulatory watchdogs in California have ruled that individuals who intend running for public offices in the state can no longer accept donations made in cryptocurrencies.

No Bitcoin donations for political campaigns

According to the Associated Press, the Fair Political Practices Commission which includes a five-member non-partisan commission has voted to ban cryptocurrency donations for candidates running for public offices in the state.

The Fair Political Practices Commission functions as the campaign watchdog of California, and it voted Thursday 3-1 in favor of a ban.

The FPPC’s decision to ban cryptocurrencies in political campaigns comes not long after the commission received a staff report to ascertain the approaches taken by other states towards regulating digital assets being given as campaign contributions.

Reason for the ban

The news outlet reported that campaign watchdogs had specific concerns related to tracking the origin of crypto donations and how they would influence the transparency in the political sphere.

The difficulty in tracking the origin of cryptocurrencies has always been a major source of aversion for its adoption in politics and other sectors that demand high levels of transparency.

The ban comes after a hearing in August where the Fair Political Practices Commission discussed several election issues, including whether or not cryptocurrencies should be allowed in political donations.

As at that time, the meeting ended without a conclusive agreement, as its members stated that they needed more time to fully understand the issue.

A day after the decision was made a representative of the FPPC told CoinDesk that the issue would still be debated and analyzed in subsequent meetings, stating:

“There was extensive research by staff, input from stakeholders that was publicly displayed on our website and public debate among the Commission today and that is the decision rendered. As was publicly stated by many if not all of the Commissioners, there will be further debate and analysis in the coming months and years.”

Unlike the state of California, the United States Federal Election Commission made a ruling in 2014 that permits candidates of public offices to accept cryptocurrencies as an in-kind donation.

Despite this, the staff report of the campaign watchdog explained that its decision is “consistent” with campaign activity FAQs from 2014. The report further states that:

“the staff has done extensive research on the topic and recommends that committees not accept bitcoins or other digital currency as campaign contributions at this time.…”.

California takes a cue from North Carolina, which banned campaign donations being given in cryptocurrencies in August.

Other states, like Colorado and Montana, still permit crypto donations, although with a limit.

In May, Brian Forde, a Californian Democrat and a former aide to President Obama who is currently running for the Congress, was criticized by a rival for accepting Bitcoin contributions for his political campaign.

This decision continues California’s rough history with cryptocurrency donations. Last year, the state considered banning Bitcoin transactions for charity raffles.

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