Three Hawaiian financial regulators have launched the Digital Currency Sandbox Initiative. This initiative will enable specialized cryptocurrency firms to be exempted from the Double-Reserve Requirement. Those regulators include the Hawaiian Department of Commerce, the Hawaiian Technology Development Corporation and the Division of Financial Institutions. A representative with DFI noted that selective firms would be given two-year provisions on the “State Money Transmitter License” requirement. This announcement follows after a prolonged press release was held on March 17th.
Hawaii infamously became known as the most restrictive cryptocurrency legislation in the United States of America. Financial experts have often opposed the Hawaiian government’s assessment of the cryptocurrency industry, with numerous other states earning an influx of taxes from this marketspace. Though there’s never been an official ban on cryptocurrency firms in Hawaii, specific conditions prompted the market to have minimal participants. This condition is called the “Double Reserve SMTL”. It requires that exchanges maintain a reserve of fiat coins that mimic the number of cryptocurrencies held by clientele. This irrational legislation saw multiple exchanges close their doors, include Coinbase.
Mistakes Recognized
The Division of Financial Institutions in Hawaii is recognizing that they’ve made mistakes with their 2017 Legislation. The Digital Currency Sandbox Initiative hopes to solve the various concerns surrounding these reserve protocols. It should be mentioned that businesses will still need to meet the additional regulatory requirements in Hawaii, which are known for limiting operational capabilities. It’s not known if these protocols will be revised or terminated following negotiations with sandbox members.
Press release statements were provided through the Commissioner of Financial Institutions. Iris Ikeda expressed: “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. Craft legislation that is conducive to cryptocurrencies development in Hawaii.”