Californian political campaigns now accept Bitcoin contributions
According to reports on July 21, a new law was passed in California that will allow candidates for state and local offices to accept cryptocurrency donations. The new law will be in effect within 60 days after its approval by the state's Fair Political Practices Commission.
California's legislature has accepted cryptocurrency, but there are also some caveats, including requiring bitcoin contributions to be converted into dollars immediately.
According to the approved regulation, which was first instituted back in May, all state and local campaigns must have "adequate KYC procedures for forming a reasonable belief that each contributor is who they claim to be."
The law requires the candidate to use an approved cryptocurrency processor who will perform all essential Know Your Customer (KYC) practices, such as obtaining the contributor's name, address, occupation, and employer.
At Thursday's approval meeting, David Bainbridge, general counsel for the FPPC, pointed out the inherent concern with cryptocurrency and the possibility of illegal contributions because it is inherently anonymous, and it's often untraceable.
He added, “So in drafting this regulation we were cognizant of these very legitimate concerns which was the reason the Commission four years ago prohibited contributions by cryptocurrency.”
In the past, California, along with eight other states, prohibited crypto contributions. There are several states that allow donations using cryptocurrency to support political campaigns, including Washington D.C. Moreover, the commission recommended that political committees value digital currency donations according to the market value at the time the donation was made.
CBW - External Analyst