California Considers Lifting Ban on Crypto Donations for Political Campaigns

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California’s state reg­u­la­tor – Fair Polit­i­cal Prac­tices Com­mis­sion (FPPC) – will con­sid­er allow­ing the use of cryp­tocur­ren­cies for polit­i­cal cam­paign dona­tions four years after ban­ning them.

Potential Law Amendments

Dur­ing its most recent Com­mis­sion Meet­ing, the FPPC dis­closed it had arranged a “pre-notice dis­cus­sion” where it will con­tem­plate whether to enable dig­i­tal asset polit­i­cal dona­tions in the state. The con­ver­sa­tion will be held lat­er this week (May 19):

“The pro­posed reg­u­la­tions and amend­ments are pre­sent­ed for dis­cus­sion and direc­tion by the Com­mis­sion and will be pre­sent­ed for adop­tion at a sub­se­quent meet­ing. The Com­mis­sion will review and dis­cuss poten­tial spon­sored and oth­er leg­is­la­tion, The Com­mis­sion will pro­vide direc­tion on future leg­is­la­tion to be sought by the agency.”

Local watch­dogs pro­hib­it­ed send­ing and receiv­ing cryp­tocur­ren­cy dona­tions for polit­i­cal cam­paigns in Sep­tem­ber 2018. Back then, the reg­u­la­tors argued it is hard to track the ori­gin of such con­tri­bu­tions, com­pro­mis­ing the trans­paren­cy of one’s candidacy.

Ban­ning cryp­to dona­tions for polit­i­cal par­ties is a pol­i­cy imposed by oth­ers, too. Last month, the author­i­ties of Ire­land did the same, cit­ing fears of Russ­ian inter­ven­tion. Sev­er­al reports sug­gest­ed that oli­garchs part of Putin’s inner cycle have begun uti­liz­ing bit­coin and alt­coins to avoid the mon­e­tary sanc­tions enforced by the West.

Irish Gov­ern­ment Min­is­ter – Dar­ragh O’Brien – believes the pro­hi­bi­tion of cryp­to con­tri­bu­tions in polit­i­cal cam­paigns could “pro­tect against mali­cious online inter­fer­ence while also over­haul­ing polit­i­cal fund­ing laws to pre­vent for­eign inter­fer­ence in how par­ties or indi­vid­u­als are finan­cial­ly supported.”

California’s Governor and Crypto-Friendly Executive Order

Ear­li­er this month, the Gov­er­nor of Cal­i­for­nia – Gavin New­som – issued an exec­u­tive order on cryp­tocur­ren­cies. The leg­is­la­tion should lay out a road map for estab­lish­ing a reg­u­la­to­ry frame­work for the sec­tor and grant more investor pro­tec­tion. Fur­ther­more, it explores how dig­i­tal assets and the under­ly­ing blockchain tech­nol­o­gy can be incor­po­rat­ed with Cal­i­for­nia businesses.

Address­ing the move was Dee Dee Myers – Senior Advi­sor to Gov­er­nor Gavin New­som. In her view, the West­ern state is a top loca­tion for cryp­to-relat­ed firms and domes­tic law­mak­ers will aim to sup­port their efforts by estab­lish­ing wel­com­ing legislation:

“Of the 800 blockchain busi­ness­es in North Amer­i­ca, about a quar­ter of them are in Cal­i­for­nia, dra­mat­i­cal­ly more than any oth­er state. We’ve heard from so many that they want to be here, and we want to help them do that responsibly.”

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