Canada is moving closer to banning political donations made in cryptocurrency, as lawmakers in Ottawa tighten rules around how money flows into elections.

That’s after a proposed law — Bill C-25, the Strong and Free Elections Act — passed a second reading in the House of Commons on Friday. The vote signals that lawmakers support the bill in principle and will now study it in detail at committee, where amendments can still be made.

The legislation would prohibit political parties and candidates from accepting cryptocurrency donations, closing what regulators see as a gap in campaign finance rules.

First introduced on March 26, the bill is a broader overhaul of election laws aimed at strengthening transparency, tightening enforcement and…