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The House of Representatives of Hawaii’s Thirty-First Legislature is asking the government to reconsider anti-bitcoin and cryptocurrency rulings.
Hawaii’s House of Representatives is asking the government to lift limitations and ease regulations on cryptocurrency businesses in the state. This is to encourage companies and stakeholders to take root there.
In 2016, Hawaii’s Department of Commerce and Consumer Affairs came down on cryptocurrency companies.
Hawaii’s Mixed History with Cryptocurrency
Its ruling applied state laws governing money transfer companies to cryptocurrency companies. It mandated that cryptocurrency companies hold fiat reserves equal to their cryptocurrency holdings. Many could not keep up with these demands. Even more, it subjected them to stricter financial statement requirements.
Coinbase ceased operations in the island state following the regulations.
The DCCA further clamped down on cryptocurrency use. It argued that cryptocurrencies are not “permissible investments” under the country’s Money Transmitters Act.
The House of Representatives is now urging the government to reconsider the heavy-handed stance. It wants the government to align the asset reserve requirements with that of other states. In this way, cryptocurrency companies can conduct business more seamlessly.
The group made the request known through a bill signed on March 12, 2021. The signees include the Director of Commerce and Consumer Affairs and the Commissioner of Financial Institutions. The Executive Director and Chief Executive Officer of the Hawaii Technology and Development Corporation were also included.
Banks to Act as Digital Asset Custodians
Last year, Hawaii lawmakers proposed a bill to enable banks to take custody of digital currencies. The state aimed to provide a regulatory compliant framework for investing and transacting with cryptocurrencies. It required banks to pay an annual fee of $1.
Although the banks will keep custody, customers could initiate transactions through them. The bill was introduced on Jan. 18, 2020.
Giant institutional bitcoin adopters like Microstrategy and Tesla are changing the financial landscape in the U.S. and beyond. Their influence has undoubtedly played a part in the growing adoption and easing of cryptocurrency regulations.
States and cities in the U.S. are also jumping on the bandwagon. Miami’s Mayor announced this year that the city was fully embracing bitcoin. Wyoming’s bitcoin laws also depict a positive stance on cryptocurrencies.