California has banned the use of cryptocurrency in campaign donations for the past four years. However, it seems the ban is about to be lifted to enable people to donate digital assets to politicians.
California OKs New Guidelines for Campaign Donation
On Thursday, the Fair Political Practices Commission (FPPC) approved using digital assets in campaign donations. Accordingly, candidates for both state and local council offices are cleared to accept campaign donations in cryptocurrency.
According to the new regulations, politicians are permitted to receive bitcoin donations as long as they convert them immediately into U.S. dollars.
Aspirants must conduct the transaction to gather each donation’s name, address, occupation, and employer via a registered cryptocurrency broker.
As cryptocurrency transactions are done independent of the traditional bank’s involvement, candidates are to take charge of collecting donors’ details.
Within 60 days, California’s new regulations will go into force. California was one of the nine states that forbade the donation of cryptocurrencies.
According to a regulatory staff analysis, bitcoin contributions are accepted in 12 states plus Washington, D.C. Meanwhile, individuals’ donations in cryptocurrencies are already permitted for federal office hopefuls.
How FPPC Voted Against Crypto Campaign Donation
Due to worries that bitcoin donations “may be utilized to circumvent donation prohibitions and bans or by foreign interests to support campaigns, the FPPC voted in September 2018. The ban outlawed the sending and receiving of crypto donations to political campaigns within California.
According to FPPC communications director Jay Virunga, the commission observes trends and tries to stay ahead of changes. The adoption and visibility of cryptocurrency have brought new challenges to regulators worldwide.
Funds are the lifeblood of political campaigns, and digital assets will pose another problem in regulating fund flow.
There, FPPC aims to look into how crypto donations were made and the source of the assets. Unlike conventional banks, where financial watchdogs can easily trace funds, crypto-assets run on blockchain technology, a decentralized platform.
However, the ban has not affected the political campaigns for the various elective offices in California.
With the increasing demand for funds across political platforms, cryptocurrency is seen as one sure way that people can chip in with financial support for their candidates.
California’s Crypto-Friendly Law
In the early days of May 2022, the governor of California, Gavin Newsome, announced an executive order on digital assets. The law will set forth a plan for the industry to create a regulatory environment and offer better investor confidence.
Additionally, it looks at how California enterprises might utilize digital assets and the underlying blockchain technology.
Commenting on the move, Dee Dee Myers, the senior adviser to the governor, viewed California as a growing crypto hub. Myers added that the governor supports the state’s lawmakers and crypto firms in implementing broad regulations for the industry.
California is home to roughly a quarter of the blockchain companies in North America, more than any other state in America.
Meanwhile, the crypto community will find the latest news refreshing following the market struggles of digital tokens.
Source: https://crypto.news/california-ban-crypto-donations-political-campaign/