HAWAII’S DIGITAL CURRENCY SANDBOX ANNOUNCES FIRST COHORT OF PARTICIPANTS

Leading U.S. Cryptocurrency Players Among the 12 Companies to Kick Off the Program

News Release from Hawaii Technology Development Corp, August 19, 2020

HONOLULU – A virtual gathering of representatives for U.S.-based digital currency transmitters successfully admitted into the State of Hawaii’s Digital Currency Innovation Lab (DCIL) kickstarted the official launch of the program today. Created through a partnership between the Department of Commerce and Consumer Affairs, Division of Financial Institutions (DFI) and Hawaii Technology Development Corporation (HTDC), this Innovation Lab will explore digital currency innovation and is the first of its kind in the state.

Through the issuance of a “no action message,” DFI is not taking any action against these companies, which need a money transmitter license to operate under the current statutory scheme.  For the duration of the DCIL, DFI will allow the admitted digital currency issuers to conduct business in Hawaii without first obtaining a state money transmitter license.  The companies will be required to comply with other sections of the money transmitter laws.

The two-year initiative began accepting applications in March and received submissions from 19 companies. Following a comprehensive review, 12 participants who fulfilled the conditions to provide their services in the state have been selected to join the program. These companies are: Apex Crypto, bitFlyer USA, BlockFi Trading, CEX.IO, Cloud Nalu, Coinme, ErisX, Flexa Network, Gemini Trust Company, Novi Financial, River Financial and Robinhood Crypto.

“We are excited to welcome our inaugural batch of participants into the DCIL. Hawaii-based consumers can look forward to a variety of options for services offered by digital currency companies in the state. I anticipate leveraging this opportunity for our state to develop a robust understanding of one of the most exciting areas in fintech,” says Iris Ikeda, Commissioner of Financial Institutions.  “States across the nation are starting to review their laws to determine whether the digital currency companies should be regulated for the benefit of consumers,” continues Commissioner Ikeda.

Representing Hawaii is Cloud Nalu, a Maui-based technology company serving small-medium businesses that aims to provide blockchain and digital currency integration services with existing business processes through this program. Facebook’s Novi Financial (formerly “Calibra”), New York-based cryptocurrency exchange, Gemini Trust and popular investing app, Robinhood are notable names among the other participants helping to shape the future of fintech in the State.

During this period of participation, the companies committed to providing key metrics specified by DFI. The data collected will be instrumental in developing local legislation around digital currency while laying the groundwork for the next phase of this pilot program.

It is illegal for digital currency companies to allow Hawaii-based consumers access to their platforms without a license unless the company is in the DCIL. Through this program the public can now easily leverage the services of these selected companies – including purchasing, storing and trading popular digital currencies such as bitcoin, Ethereum, litecoin and ZCash.

Len Higashi, acting executive director of HTDC is encouraged by the interest shown in the DCIL, despite the pandemic. “The response we have received from participating companies and the community is testament to the value of our program in advancing the potential adoption of digital currencies in the state. Through the DCIL, we hope to identify opportunities for economic development through this effort and very optimistic that we will be able to do so.”

For more details on the pilot program and to stay up to date with developments in the DCIL, visit the HTDC website at: www.htdc.org/programs/#dcil-section.

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