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Hawaii has decided to provide a favorable environment for companies specializing in Bitcoin and cryptocurrencies. It has just granted 12 crypto companies permission to operate in its territory. These companies will be able to operate even without a money transmission license, and this over a period of 2 years thanks to the new Digital Currency Innovation Lab (DCIL) program. If we add to these economic incentives the glowing touristic reputation of the island, Hawaii island could become a very attractive destination.
Several companies specializing in cryptocurrencies have announced that they now had legal permission to work in the state of Hawaii. Indeed, it is thanks to the Digital Currency Innovation Lab (DCIL) that these companies were able to obtain the authorization to operate in the archipelago. This is a pilot program that allows digital currency issuers to do business without obtaining a state currency issuer’s license. It is a partnership between Hawaii’s Division of Financial Institutions (DFI) and the Hawaii Technology Development Corporation (HTDC). It will run from August 19, 2020, to December 31, 2022, so well over two years for even small companies to develop and gain a license.
At last reports, 12 cryptocurrency companies have been accepted for the program from a list of 19 that have applied to join so far. They have fulfilled all the conditions of the program and have de facto been admitted.
In addition, the DFI has issued a no-action message indicating that no action will be taken against the companies since they have been admitted to the DCIL program. However, the DFI will monitor all crypto transactions that take place through the Digital Currency Innovation Lab (DCIL).
The 12 companies admitted to the program are Apex Crypto, Bitflyer USA, Blockfi, Cex.io, Cloud Nalu, Coinme, Erisx, Flexa, Gemini Exchange, Novi Financial, River Financial and Robinhood Crypto.
As a result of DFI’s oversight, each company will be required to provide updates, particularly with respect to the number and value of transactions. They will also be required to provide information in relation to the number of complaints received and any regulatory enforcement orders.
At the end of the 2-year period, an explicit authorization to continue trading activities will be issued. To this end, companies that do not receive this authorization will be required to terminate all cryptocurrency transactions. According to the program’s website, companies will also have to execute the liquidation plan and exit strategy, as agreed in the participation agreement.
Even considering this strong framework, Hawaii’s offer is still very appealing and more crypto startups should certainly apply in the near future.