| 43 | | - | WHEREAS, cryptocurrency has grown in popularity nationwide, but there is little regulation of the industry; and WHEREAS, according to the Federal Trade Commission, cryptocurrency is digital money, which is the blanket term used to describe any money-like asset that is primarily managed, stored, or exchanged using internet technology; and WHEREAS, digital currency does not have a physical form like banknotes or minted coins, is not typically issued or backed by the United States government or any other government or central bank, and is not considered legal tender in most countries; and WHEREAS, in 2016, the Department of Commerce and Consumer Affairs' Division of Financial Institutions found that digital currency transactions differ from money transmissions and that subjecting digital currency companies, virtual currency companies, and cryptocurrency companies to the licensing and asset reserve scheme under the Money Transmitters Modernization Act made it too burdensome for these companies to do business in the State; and WHEREAS, the Division of Financial Institutions of the Department of Commerce and Consumer Affairs and Hawaii Technology Development Corporation have jointly created a two-year sandbox, called the Digital Currency Innovation Lab (DCIL) pilot project, to allow for limited activity of digital currency companies, virtual currency companies, and cryptocurrency companies in the State to better understand the cryptocurrency industry and determine the best method for its regulation and oversight; and WHEREAS, as of the fourth quarter of 2021, there are approximately one hundred thirty-four thousand digital currency consumers who have completed more than $896,000,000 in transactions with the fifteen cryptocurrency-based companies that have been accepted into the DCIL pilot project; and WHEREAS, with the termination of the DCIL pilot project on June 30, 2022, these digital currency consumers will have no choice but to empty and close their digital wallets by December 31, 2022; and WHEREAS, the results of the DCIL pilot project have confirmed the popularity and versatility of digital currency transactions and the need for more comprehensive regulation of digital currency; and WHEREAS, the Legislature has yet to pass a measure that either exempts digital currency from the Money Transmitters Modernization Act or regulates digital currency within the State; now, therefore, BE IT RESOLVED by the House of Representatives of the Thirty-first Legislature of the State of Hawaii, Regular Session of 2022, that if the Legislature takes no action to exempt digital currency companies from the money transmitter license requirements or does not pass a measure establishing a comprehensive regulatory scheme for digital currency companies, then the Department of Commerce and Consumer Affairs' Division of Financial Institutions and Hawaii Technology Development Corporation are requested to extend the Digital Currency Innovation Lab pilot project until June 30, 2024, or until legislation is enacted that provides for a digital currency licensure program, whichever occurs first; and BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Commissioner of Financial Institutions and Executive Director of the Hawaii Technology Development Corporation. Report Title: Cryptocurrency; Digital Currency; Division of Financial Institutions; Hawaii Technology Development Corporation; Digital Currency Innovation Lab Pilot Project |
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| 43 | + | WHEREAS, cryptocurrency has grown in popularity nationwide, but there is little regulation of the industry; and WHEREAS, according to the Federal Trade Commission, cryptocurrency is digital money, which is the blanket term used to describe any money-like asset that is primarily managed, stored, or exchanged using internet technology; and WHEREAS, digital currency does not have a physical form like banknotes or minted coins, is not typically issued or backed by the United States government or any other government or central bank, and is not considered legal tender in most countries; and WHEREAS, in 2016, the Department of Commerce and Consumer Affairs' Division of Financial Institutions found that digital currency transactions differ from money transmissions and that subjecting digital currency companies, virtual currency companies, and cryptocurrency companies to the licensing and asset reserve scheme under the Money Transmitters Modernization Act made it too burdensome for these companies to do business in the State; and WHEREAS, the Division of Financial Institutions of the Department of Commerce and Consumer Affairs and Hawaii Technology Development Corporation have jointly created a two-year sandbox, called the Digital Currency Innovation Lab (DCIL) pilot project, to allow for limited activity of digital currency companies, virtual currency companies, and cryptocurrency companies in the State to better understand the cryptocurrency industry and determine the best method for its regulation and oversight; and WHEREAS, there are approximately sixty-one thousand digital currency consumers who have completed more than $611,000,000 in transactions with the fifteen cryptocurrency-based companies that have been accepted into the DCIL pilot project; and WHEREAS, with the termination of the DCIL pilot project on June 30, 2022, these digital currency consumers will have no choice but to empty and close their digital wallets by December 31, 2022; and WHEREAS, the results of the DCIL pilot program have confirmed the popularity and versatility of digital currency transactions and the need for more comprehensive regulation of digital currency; and WHEREAS, the Legislature has yet to pass a measure that either exempts digital currency from the Money Transmitters Modernization Act or regulates digital currency within the State; now, therefore, BE IT RESOLVED by the House of Representatives of the Thirty-first Legislature of the State of Hawaii, Regular Session of 2022, that the Department of Commerce and Consumer Affairs' Division of Financial Institutions and Hawaii Technology Development Corporation are requested to extend the Digital Currency Innovation Lab pilot project for another two years or until legislation is enacted that provides for a digital currency licensure program, whichever occurs first; and BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Commissioner of Financial Institutions and Executive Director of the Hawaii Technology Development Corporation. Report Title: Cryptocurrency; Digital Currency; Division of Financial Institutions; Hawaii Technology Development Corporation; Digital Currency Innovation Lab Pilot Project |
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