The government of Hawaii has launched a blockchain and cryptocurrency incubator named ‘Digital Currency Innovation Lab’ in collaboration with the Hawaii Department of Commerce and Consumer Affairs, Division of Financial Institution (DFI), and the Hawaii Technology Development Corporation (HTDC).
As per the official announcement, this incubator (which will be operational for two years) will enable “digital currency issuers to do business in Hawaii without obtaining a state money transmitter license during the effective period of the pilot program.” The government claimed that, through this initiative, it aims to gather an in-depth understanding of digital currencies and formulate cryptocurrency regulations for the future.
Hawaii’s attempt to attract crypto firms
Ever since Hawaii introduced the double-reserve requirement back in 2017, this is Hawaii’s first attempt to attract crypto firms. Iris Ikeda, Hawaii’s commissioner of financial institutions, stated that the organization has directed the companies operating under the sandbox to not take any action, in order to prevent regulatory recourse. He added, “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. 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.”
Len Higashi, interim executive director of the HTDC is hopeful that this program will help Hawaii to establish itself as a leader in financial technology and drive economic growth.
As per the directive, participating companies will be required to pay an application fee of $500 before 1st May 2020, apart from $1,000 for each term of participation.
Crypto Regulations in Hawaii
HTDC acknowledged that the ‘Digital Currency Innovation Lab’ initiative is aimed to help companies struggling with the double reserve requirements. However, crypto regulations and the country’s way forward in this regard is still ambiguous.
According to an official release on the website of HTDC, at the end of the two year program, participating companies will have to complete all digital currency transactions, after which the DFI will grant appropriate licenses to continue operations.