Hawaii Opens Up Regulatory Sandbox For Crypto Payment Companies Till 2021
Hawaii launches a regulatory sandbox, “Digital Currency Innovation Lab”, a pilot program to boost the understanding of digital currencies. The program will run for two years offering crypto startups and companies an opportunity to do business in the country “without obtaining a state money transmitter license.”
Hawaii launches the Digital Currency Innovation Lab
In a joint partnership among three financial authorities in Hawaii, Department of Commerce and Consumer Affairs, Division of Financial Institutions (DFI) and Hawaii Technology Development Corporation (HTDC), cryptocurrency payment services will now be able to carry out business in the state under the new sandbox program. The new program is set to assist the authorities shape up regulations for the industry while understanding it deeper.
Furthermore, this looks set to relax the arduous rules that crypto companies have had to deal with over the past few years in the state. One particular rule that is set to be eased is the “double-reserve” requirement that states companies can only hold as much fiat currency as their customers hold crypto.
Those companies that will be selected in the program will have total autonomy to carry out business activities that would previously been considered unlicensed money transfer activity. This means none of the financial authorities will take action for companies registered in the program. Iris Ikeda, Commissioner of Financial Institutions says,
“DFI is leveraging its statutory authority to provide an innovative way to introduce digital currency issuers into the State of Hawaii, while ensuring the safety of our consumers.”
“Financial authorities to benefit from program”
The digital currency pilot program is specifically set to help in regulating the crypto payments industry in the state better according to Len Higashi, acting executive director of HTDC. Len believes Hawaii will lead in the digital currency payments race by being an early adopter. He remarked,
“By spearheading the Digital Currency Innovation Lab, Hawaii can position itself on the forefront of financial technology and potentially, reap the economic benefits that accompany the leadership stance taken.”
Iris also believes that the project will help in understanding and appreciating the overall advantages that cryptocurrency offers. He said,
“By acknowledging digital currencies as a transmission vehicle of the future, we will be able to craft legislation that is conducive to its development in Hawaii.”