Two days ago, the Governor’s office of Hawaii released important information connected with digital currencies. Hawaii Technology Development Corporation (HTDC) in cooperation with the state Department of Commerce and Consumer Affairs, Division of Financial Institution (DFI) launched a digital currency sandbox.
The purpose of “Digital Currency Innovation Lab” is to attract crypto firms. It is important to keep in mind that the initiative will run for two years. Thanks to this program crypto-related companies will be able to do business in Hawaii without obtaining a state money transmitter license. It means that companies don’t have to worry about this topic.
Moreover, this program will allow to gather information about the digital currency. This program will also affect the future of crypto regulations in Hawaii.
The importance of digital currency sandbox
Hawaii’s commissioner of financial institutions Iris Ikeda made a comment regarding the digital currency sandbox. According to Ikeda, DFI issued a no-action message to prevent regulatory recourse for companies. This decision will allow to solve potential issues related to unlicensed money transmission activities.
Companies should take into account that, if they want to participate in this program they have to apply until May 1. Also, companies must pay a $500 application fee as well as $1,000 for each term of participation.
Several years ago, Hawaii introduced the double-reserve requirement. As a result, companies should hold an equal sum of fiat currencies and their clients’ crypto holdings.
This decision had a negative impact on the crypto industry in Hawaii. Most blockchain companies left the state, including crypto exchange Coinbase.
Digital currency sandbox without a doubt is a step forward for companies as well authorities. However, it is not clear what will happen after the two year period will end in 2022.
Rhode Island introduced a regulatory sandbox. The purpose of this sandbox is to facilitate innovation within blockchain and cryptocurrency.