September 23rd, 2018: Those looking to contribute to politicians in California will no longer be able to make those donations with cryptocurrencies, according to a recent report from the Associated Press (AP). The decision was made by California’s campaign watchdog arm and the Fair Political Practices Commission which voted on the issue (3-1) last Thursday.
The rationale behind the ban on cryptocurrencies like bitcoin (BTC), ethereum (ETH), monero (XMR), and others is that the are simply too difficult to track. At a time when many in the political sphere are interested in more transparency in the political process and records of campaign contributions, some see cryptocurrencies as an avenue for the continuation of “dark money” in the system.
Unlike California, however, the Federal Elections Commission (FEC) does allow bitcoin (and other cryptocurrency) donations to federal candidates. In addition to the FEC rules on the matter, many individual states still allow, or are lobbying for, political contributions to be done in the form of cryptocurrencies
Over the summer, Oregon introduced the proposal to allow political contributions being made in cryptocurrencies. Secretary of State Dennis Richardson encouraged the idea saying that it would expand political participation in Oregon.
Cryptocurrency is here to stay, and Oregon needs to adapt to that reality by allowing this new form of donating… Allowing cryptocurrency to be a part of our elections process is a new and innovative way to expand participation in Oregon elections.
However, California is not alone in its uneasiness about cryptocurrencies being involved in the political process either. South Carolina is another state that has banned cryptocurrency contributions to candidates, while states like Montana and Colorado, which both approved of allowing the crypto donations, now currently allow them with some restrictions.
Using the FEC rules from 2014, campaigns may accept cryptocurrency donations so long as they report the value of the donations (measured in the appropriate fiat conversion rate of the date the cryptocurrency was received) and all cryptocurrencies must be converted back into fiat before being deposited into official campaign accounts.