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Since 2018, the state of California has banned all political donations in cryptocurrencies, citing fear of foreign political interference and the potential of using digital assets to bypass campaign contribution limits. However, that may change this upcoming week, as the state's Fair Political Practices Commission decides on Thursday whether to amend the regulation.

Groups monitoring campaign finance say virtual assets carry a risk of enabling anonymous and private campaign contributions. 

According to Cointelegraph, the cryptocurrency prohibition only applies to local and state political campaigns, not those at the federal level. This means that political candidates like Democrat Aarika Rhodes, who is seeking office in California's 32nd congressional district, can exhort supporters to donate Bitcoin without penalty.

Other states have taken a different approach: Colorado only allows crypto donations up to the same level as regular currency. And in 2018, South Carolina declared that cryptocurrency was not eligible for campaign contributions.

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California’s Fair Political Practices Commission, or FPPC, is reviewing the regulation because it is trying to "stay ahead" of the trends, according to FPPC’s communications director Jay Wierenga in an interview with Cointelegraph

To that point, in March, the commission reviewed the usage of non-fungible tokens or NFTs for campaign fundraising, and said that political campaigns are required to report the entire sale of NFTs as a contribution.

“This has been on our radar since late last year,” Jay Wierenga told Cointelegraph. “Crypto [has] obviously has grown in usage and visibility since 2019. So, the Commission wants to review it and determine if any changes should be made or not.”