Hawaii has implemented its very first digital currency sandbox pilot program to attract more investment in this area. It will give selected firms a two-year reprieve from Hawaii’s state money transmitter license requirement.
19 March, 2020 | AtoZ Markets – Hawaiian regulators have launched a digital currency “sandbox” initiative that exempts participating crypto companies from Hawaii’s infamous double reserve requirement. The state has announced “Digital Currency Innovation Lab”, a two-year initiative that allows digital currency issuers to do business in Hawaii without a state money issuer license. Moreover, the governor said it hopes to gain a better understanding of the digital currency and its activities during these two years, to draft legislation. The statement also said:
“The knowledge gained will be used to guide legislation and determine the future of digital currency in Hawaii”.
However, the program is the result of a partnership between state agencies, namely:
- The Department of Commerce and Consumer Affairs,
- The Division of Financial Institutions (DFI) and
- Hawaii Technology Development Corporation (HTDC).
Hawaii Welcomes Applications for Digital Currency Innovation Lab
The Hawaii sandbox is not a regulatory free-for-all, according to the press release. However, prospective companies must make an entry request via HTDC. These companies have to pay an application fee of $ 500, plus $ 1,000 for each participating term.
Companies can now register with the Digital Currency Innovation Lab until May 1, 2020. However, the selected participants will have to demonstrate financial and technical expertise, as well as hold the necessary capital.
The DFI now seems to recognize that its bar was too high. The DFI “wanted to respond to the concerns” of companies that could not meet regulatory requirements. The HTDC also writes that in the FAQ for the “sandbox” initiative.
The DFI is committed not to take measures against the participants in the sandbox, according to the press release. Iris Ikeda, commissioner of financial institutions said:
“The DFI is using its legal power to provide an innovative way to introduce digital money issuers to the state of Hawaii while ensuring the safety of our consumers”.
Ultimately, the two-year program is an effort to guide future policy. Len Higashi, Acting Executive Director of HTDC, said the prospects offered by the program could also pave the way for new steps towards crypto. The pilot program has the potential to position Hawaii as an early adopter of crypto, according to Higashi.
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