As we enter another election season, California has become the latest state grappling with the role of cryptocurrencies in campaigns.
On Thursday, the debated — but ultimately did not decide among — 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 () provides conflicted with efforts to ensure transparency.
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 , 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 at the time.
Looking to the 2020 presidential election, entrepreneur , who is running for president on a platform including a universal basic income, is the first in the field to follow in the footsteps of previous presidential candidates such as Sen. Rand Paul of Kentucky, who announced he was accepting crypto contributions for his 2016 campaign.
On the federal level, the FEC’s essentially places crypto on the same footing as other “in-kind” donations, although contributions are banned when they involve “a prohibited source, that exceeds the contributor’s annual contribution limit, or that is otherwise not legal.”
Campaigns aren’t the only crypto-related issues facing lawmakers. In June, the House Ethics Committee that members of Congress must disclose any holdings of crypto worth more than $1,000 in their annual financial disclosures, just as they are required to report other assets, including real estate, stocks, and other investments.
Along with disclosing investment holdings, the House committee also included actively mining for crypto among the outside jobs that are subject to an annual limit of about $28,000. To date, it’s not clear whether any members of Congress have done that.