Bitcoin is not new to politics; in 2013 the US Federal Election Commission started exploring the idea of treating Bitcoin donations as in-kind contributions. Later, they determined that political campaigns could accept Bitcoin as donations in 2014.
In its report, the commission noted,
The initial receipt of Bitcoins as a contribution, regardless of subsequent disposition should be reported as in-kind contributions.
Fast forward four years later to 2018 August and candidates for public office in California were reported to expect cryptocurrency donations for their political campaigns. However, even after the California Political Practices Commission had met to discuss the issue of accepting cryptocurrency donations as part of campaign donations, there were still uncertainties. The commission’s chairwoman, Alice Germond, remarked that she would “be inclined to think that Bitcoin is a thing that is not US money but is more like a currency, like the euro.” She further added that she would like to hear more to develop her thinking and set a definite definition for what qualifies as a cryptocurrency.
FPPC Prohibits Crypto Donations
At the moment, reports indicate that candidates running for public office in the US state of California may not be able to receive in-kind donations in crypto after all. The move comes after a ruling from California’s political watchdog, FPPC.
The FPPC (Fair Political Practices Commission) voted 3 to 1 yesterday in a move to prohibit in-kind political donations in cryptocurrencies. The commission cited difficulty in tracking cryptocurrency donations as a concern over political transparency in the golden state.
Verify and Regulate
Even though some commissioners were against the idea of a full ban on crypto, some were concerned about methods that can be used to verify and regulate crypto donations.
Since 2014, crypto donations in political campaigns have been on the rise. For instance, Texas Attorney General Greg Abbott received Bitcoin donations in April 2014.
The FPPC had agreed in August to cap donations at $100 for 2018’s midterm elections, as the commissioners looked to gather more information in order to come up with a conclusive stance.
While speaking to coin desk, an FPPC representative told Coin Desk,
There was extensive research by staff, input from stakeholders that was publicly displayed on our website and public debate among the Commission today and that is the decision rendered. As was publicly stated by many if not all of the Commissioners, there will be further debate and analysis in the coming months and years
Other states such as Colorado have permitted crypto funding, with a set cap on donations. States like South Carolina, on the other hand, have followed in the spirit of California and prohibited these donations.
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