As we enter another election season, California has become the latest state grappling with the role of cryptocurrencies in campaigns.
On Thursday, the California Fair Political Practices Commission debated — but ultimately did not decide among — three proposals governing whether candidates in the state could accept campaign donations in cryptocurrency, including one that would cap the maximum donation at the equivalent of $100. The California commission will return to the topic in its next meeting in September.
While the Federal Election Commission essentially gave the green light to crypto donations in federal elections back in 2014, California is the latest state to consider regulations limiting digital currencies in state and local elections. Last October, for example, a similar commission in Kansas prohibited crypto contributions in that state, arguing the anonymity bitcoin (BTC) provides conflicted with efforts to ensure transparency.
“It’s totally contrary to the transparency we’re asking for our political system to provide to the public,” Kansas Governmental Ethics Commissioner Jerome Hellmer said at the time.
In California, a representative of a bipartisan political advocacy organization argued Thursday that the state commission should take its time understanding the issues, saying that until there’s time to consider “the traceability of the source of donations, there’s not enough evidence to adopt a blanket rule on cryptocurrency.”
“It’s an emerging issue, and states are still [examining] it,” Nicolas Heidorn, policy and legal director of California Common Cause, tells ThirtyK. “There is no clear consensus on it.”
A Long History
Given New Hampshire’s libertarian bent, it’s not surprising that the first candidate to accept crypto donations was from that state. Back in 2014, unsuccessful Republican gubernatorial candidate Andrew Hemingway claimed that as much as 20 percent of his initial contributions were in bitcoin. “I think by nature the currency trends significantly young and tech-savvy, so that’s my base,” he told CNBC at the time.
Congressional candidates soon followed, including a Colorado Democrat named Jared Polis. Today, he’s running for governor of the state on a platform that includes attracting the blockchain industry to Colorado.
Like California, Colorado is considering draft rules allowing crypto in local elections.