Hawaii Senate Bill SR25

Hawaii 2022 Regular Session

• Introduced: 3/8/22
• Refer: 3/11/22

Caption

Requesting The Department Of Commerce And Consumer Affairs' Division Of Financial Institutions And The Hawaii Technology Development Corporation To Extend The Digital Currency Innovation Lab Pilot Project.

Impact

The resolution underscores the growing popularity and use of cryptocurrency in Hawaii, which has seen over $611 million in transactions by approximately sixty-one thousand consumers. However, the current regulatory environment presents challenges for cryptocurrency businesses, often requiring them to navigate frameworks originally designed for traditional financial practices. Without the extension of the pilot project, these businesses may face difficulties re-establishing themselves under a more stringent licensing regime, potentially stifling innovation in this rapidly evolving sector.

Summary

Senate Resolution 25 (SR25) requests that the Department of Commerce and Consumer Affairs' Division of Financial Institutions and the Hawaii Technology Development Corporation extend the Digital Currency Innovation Lab (DCIL) pilot project for another two years. The DCIL was initially established to allow digital currency companies to operate in a regulated environment and to help in the development of regulatory frameworks that would ease the burdens associated with existing financial regulations like those from the Money Transmitters Act. With the pilot project initially set to end on June 30, 2022, the resolution aims to prevent a disruption in services for the digital currency users relying on these companies.

Contention

Notably, there has been a push for more comprehensive regulation in the area of digital currencies. Critics of the existing Money Transmitters Act argue that it is not adequately suited to accommodate the unique characteristics of digital currencies, which do not fit neatly into traditional financial categories. Proponents of SR25 believe that extending the DCIL will allow for a better understanding of how to regulate these emerging technologies while providing a safer space for consumers to engage in digital transactions.