Crypto Donations for California Political Candidates May Soon Be Allowed
New Laws In California May Open The Door To Donations For Political Candidates And Election Efforts
In a meeting on Thursday, August 16th, the California Fair Political Practices Commission held a meeting regarding the issues in elections that the state is presently dealing with. One of the topics of discussion that arose was the concept of allowing public office candidates to accept campaign donations in the form of cryptocurrency.
During the discussion, chairwoman Alice Germond mentioned the important point of establishing a specific definition for what classifies as cryptocurrency. She commented, “I would be inclined to think that bitcoin is a thing that is not U.S. money but is more like a currency, like the euro. But I would like to hear more to develop my thinking on this.” Nicolas Hedorn, director of nonpartisan organization California Common Cause said that he would be in favor of allowing crypto to be used as a donation until a final decision was met, but this idea was shot down.
Commissioner Allison Hayward did not see the point in completely banning cryptocurrency from this proposal, echoing Germond’s wish to learn more information about the industry. She recognized that the cryptocurrency industry is still new, but blockchain technology had real potential for “tracing activity.” She added, “I don't think we're there yet, but I would hate for something we do to forestall that later on. I don't know what that would be but … blockchain might be a very useful tool for us and I'd hate to prevent that.”
Two other commissioners, Brian Hatch and Frank Cardenas, also do not believe a ban is necessary, but their biggest concern is the threat of fraud. Hatch specifically said that there is the potential for a contribution to be sent with the assumed location of California, but hackers have the ability to actually source it from a different origin.
There was a moment during discussions where the idea of limiting cryptocurrency donations in campaigns to $100 for this year’s midterm elections. This would give them the opportunity to study how it impacts the elections, delaying their decision until 2019 when no election is on the table. Unfortunately, the idea remains just an idea with no actual follow-through yet.
As it stands, no decision has been made, which could be seen as a good thing. The committee does not have a firm grasp on the industry at this time, which was their primary reason for not locking down this option. They already have an example of how it could work through a 2014 ruling by the Federal Election Commission, which lets candidates use their crypto donations as an in-kind donation, specifically referencing Bitcoin. However, at least for now, the commission has planned to meet again in a month, during which time they will discuss this issue again, which will hopefully come with some decisions.