State Of California Bans Bitcoin and Cryptocurrency for Political Donations
The state political watchdog of California has decided that politicians running for public offices in the United States are forbidden from receiving donations in the form of Bitcoin. The Fair Political Practices Commission (FPPC) has voted to prohibit political donations in cryptos as they are deemed to hurt the transparency of the process.
As the transactions made on the distributed ledger technology do not have the name nor the social security number of the people donating the money, it can be harder for the authorities to prevent fraud in the elections if there is not this kind of transparency in the process.
This decision comes after hearings in the last month discussed whether cryptos should be allowed or not. While the committee did not reach a conclusion at the time, they decided against it now. Some people in the commission argued against the ban while other seemed concerned about how to verify the origin of the money.
However, it looks like there is still some space for debate over the issue in the future. While the decision will not likely change in time for this year’s elections, it may change with time. On a national level, candidates can receive Bitcoin because of a 2014 ruling that allowed it.
Some other states, such as South Carolina, have taken a similar stance and decided not to allow Bitcoin transactions while others, like Colorado, permit crypto funding, so the decisions vary a lot from state to state. This means that people from California cannot use Bitcoin to donate to any candidates in their state, independently on whether they are for the state or federal level.
California has a rough history with crypto donations. Back in 2017, the state considered banning Bitcoin transactions for charity raffles.
While some candidates were able to get a good amount of money via crypto donations, most of the time they were questioned over the transparency and the legality of these contributions as they are harder (but not impossible) to track.
One example is Brian Forde, the former aide of the ex-U. S. president Barack Obama, which was criticized for accepting Bitcoin donations during his campaign for the House of Representatives.