Hawaii: Crypto Exchanges to Pilot Regulatory Sandbox as New Regulations Go Live

The U.S. state of Hawaii has greenlighted 12 exchanges to pilot its crypto regulatory sandbox which is designed to enable bitcoin (BTC)-linked businesses to ply their trade in the area without having to obtain a money transmitter license for two years, according to a report on August 20, 2020.

Hawaii Attracts Crypto Market Participants 

Having previously made life unbearable for crypto market participants by introducing the “double-reserve requirement” legislation in 2017, a law that makes it mandatory for exchanges to match the total amount of their customers ‘ crypto in their custody with the same amount of fiat currency, Hawaii has now turned a new leaf.

Per sources close to the latest development, the state’s Digital Currency Innovation Lab (DCIL), which is a platform collaboratively established by its Department of Financial Institutions (DFI) and the Hawaii Technology Development Corporation (HTDC), has rolled out a cryptocurrency regulatory sandbox and selected 12 exchanges to pilot the project.

As reported by BTCManager, Hawaii introduced the crypto regulatory sandbox earlier in March this year, as part of plans to create an enabling environment for crypto market participants to thrive in the region. 

At the time, Iris Ikeda, Hawaii’s Commissioner of Financial Institutions said:

“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.”

Creating Economic Opportunities for Hawaii

According to the HTDC, the Digital Currency Innovation Lab received applications from 19 crypto exchanges interested in participating in the pilot project from March 17 to May 1, 2020, and after its comprehensive review process, only 12 exchanges were selected. 

The HTDC says the crypto regulatory sandbox pilot is expected to create economic opportunities for residents, promote consumer protection by providing guidance to crypto businesses, provide data to shape amenable digital currency legislation, and more.

The list of crypto exchanges approved to participate in the Hawaii crypto sandbox pilot project from August 19, 2020, to December 31, 2022, include Gemini, Robinhood Crypto, BlockFi, CEX.io, Apex Crypto, Cloud Nalu, Coinme, Flexa, Gemini, Novi, and River Financial.

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