The program will run for two years and will permit “digital currency issuers to do business in Hawaii without obtaining a state money transmitter license during the effective period of the pilot program.”
Under the program, Hawaii intends to “achieve a more in-depth perspective of digital currency” and reveal future crypto guidelines in the state.
Iris Ikeda, Hawaii’s commissioner of financial institutions, has stressed that the DFI has published a no-action directive to avoid regulatory action against enterprises functioning under the sandbox and involve in what is generally perceived as unlicensed money remitting operations.
Ikeda explained the need to recognize cryptos as value transmission vehicle of the future.
“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, active executive director of the HTDC, conveyed his belief that the program will permit Hawaii to “position itself on the forefront of financial technology and potentially, reap the economic benefits that accompany the leadership stance taken.”
Firms which are keen to join the program will have to apply before May 1 along with a processing fee of $500 plus $1,000 for every participating term.
Three years before, Hawaii implemented double reserve rule, making it compulsory for enterprises dealing with cryptocurrencies to set aside equal amount of fiat and cryptos.
Even though crypto firms are not banned from running their business in the state, the guidelines forced majority of blockchain companies operating in Hawaii to move out elsewhere. That includes popular US headquartered cryptocurrency exchange Coinbase as well.
While the HTDC website underlines that the sandbox was created to resolve the worries of enterprises dissuaded by the double-reserve provision, there is no clarity about Hawaii’s vision for its blockchain and crypto industry after the end of two year sandbox initiative.
The website points out that after the program gets over in two years “participants must conclude all digital currency transactions unless explicit approval has been granted.” The website further states that “DFI will determine the appropriate licensing for the company to continue operations, if applicable.”
A week before, Rhode Island also rolled out a regulatory sandbox structured to pave way for innovation within blockchain and cryptocurrency.