Legislators in California have decided to lift the restriction on bitcoin contributions to state and local elections.
The Fair Political Practices Commission (FPPC) determined that California citizens may donate any amount (within the state’s contribution limitations) in Bitcoin and other cryptocurrencies.
However, It may seem like California is embracing the permissionless, worldwide, and pseudonymous aspects of crypto by accepting bitcoin contributions, but there is a catch.
Only payment processors registered with the U.S. Department of the Treasury may be used to convert crypto contributions to U.S. cash instantaneously.
In addition, all state and municipal campaigns must have “sufficient KYC processes that allow it to establish a reasonable belief that it knows the genuine identity of each contribution,” according to the legislation enacted in May and initially implemented in April. Donations of bitcoin must include the donor’s name, address, profession, and employer to be regarded as legal and legitimate.
No anonymous or external crypto contributions are permitted under the new regulations to avoid foreign intervention.
And although it may seem that California is “adopting” cryptocurrency with this new regulation, the reality is that every cryptocurrency collected must be converted to USD immediately. In other words, California will accept your cryptocurrency, but it does not seem to see any long-term advantage or use in retaining it.
Despite this, the accepted guidelines were the most advantageous to cryptocurrencies compared to the alternatives presented, which included maintaining the prohibition or restricting crypto contributions at $100.