The California state Fair Political Practices Commission (FPPC) revoked a ban set in 2018 prohibiting cryptocurrency donations to state and local political campaigns. This will allow candidates to receive cryptocurrencies that they can use to fund their campaigns.
California lifts ban on crypto donations to political campaigns
California is among the nine states that banned cryptocurrency use in political campaigns because of the issues with transparency and Know Your Customer (KYC) verification. The state has also regularly discussed the viability of crypto donations due to several limitations.
In March this year, the issue of contributions within the cryptocurrency sector was discussed again. At the time, regulators were looking into selling non-fungible tokens (NFTs) in campaign fundraising.
In May this year, the FPPC released a report that examined three options for policing the cryptocurrency sector. These policies included retaining the ban on crypto donations for political campaigns or treating cryptocurrencies the same as cash where contributions were capped at $100 like in other states.
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The third option proposed by the FPPC was to treat cryptocurrencies the same as an in-kind contribution where goods and services are used instead of money. However, this would be done on the condition that the processor adopts a KYC protocol, and the contribution would be converted into fiat currency within two days.
The third option was the one that was approved on Thursday. California is not the first state that accepts crypto donations for local and political campaigns. California will join the other 12 states that have allowed political donations using cryptocurrencies. This decision will be enforced within two months.
Crypto regulations in California
Cryptocurrency adoption in the US has grown significantly over the past year. California has been one of the leading states in cryptocurrency adoption. Earlier this year, the state Senate passed a bill that allowed state government offices to make payments using cryptocurrencies.
However, this bill is yet to be approved. It was brought down after a community vote failed to approve it. However, it was given a rehearing, but this is yet to happen. Moreover, the state’s governor, Gavin Newsom, is keen on introducing crypto regulations.
In May, the governor issued an executive order that will harmonize the regulations within the state and the executive order signed by President Joe Biden earlier this year regulating the digital asset market.
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Source: https://insidebitcoins.com/news/california-supports-cryptocurrencies-for-local-and-state-political-donations