If adopted, the proposed amendment will enable candidates for public office in California to receive donations in bitcoin and other digital currencies.
The California Fair Political Practices Commission has recently arranged a meeting to address some election issues now faced by the state. Apart from other topics, the commissioners discussed whether campaigns should be able to accept virtual currencies as political contributions.
This is, however, is not the first attempt to enable the use of cryptocurrency for political campaigns, as in 2014, the Federal Election Commission permitted candidates to accept bitcoin as an in-kind donation.
During the meeting on Thursday, Chairwoman Alice Germond underlined the importance of creating a proper definition of “cryptocurrency”.
“I would be inclined to think that bitcoin is a thing that is not US money but is more like a currency, like the Euro. But I would like to hear more to develop my thinking on this,” Germond said.
Similarly, commissioner Allison Hayward supported the idea of accepting cryptocurrencies as donations and stressed the need to learn more about the digital currency sector before making the final decision. Besides, she mentioned blockchain, saying the technology holds great potential but the country is not yet ready for it.
“I think cryptocurrencies are obviously new and designed to be confidential but the blockchain technology I think might ultimately be a very robust tool in tracing activity,” she said.
Nicolas Hedorn, director of nonpartisan organization called California Common Cause, proposed to enable the use of digital currency for donations before the decision is made, but his suggestion was declined.
Other commissioners, Frank Cardenas and Brian Hatch, both claimed they are against banning the initiative. Still, the risk of fraud, Hatch noted, remains to be the biggest concern as it would be difficult to identify the actual source of contribution that can be concealed by hackers.
Ultimately, the final decision was not made as the commissioners understand the need to get wider knowledge of the concept. However, they agreed to set a $100 limit per donation for this year’s midterm elections and are going to come back to discussions next year.
The use of cryptocurrency donations, meantime, extends beyond just political campaigns. More and more charitable organizations are starting to accept bitcoin and other digital currencies as contributions. Almost three years ago, UK major bank Barclays unveiled plans to start accepting charity donations in cryptocurrency. Also, this month, blockchain company Ripple partnered with Raising Malawi, a non-profit organization run by Madonna, to help raise money for orphans and children in need in the Republic of Malawi.