Hawaii Emerges as New Crypto Hub

Hawaii's new cryptocurrency regulations are making the state more attractive to crypto companies, with firms like MetaMask and Transak now establishing offices there.

In June, regulators jointly declared that the activities of crypto companies should not be classified as money transmission under Hawaii law.

As of July 1, 2024, cryptocurrency exchanges and firms no longer need a money transmitter license to operate in Hawaii, setting it apart from most other U.S. states.

This regulatory change could attract many prominent crypto firms back to Hawaii, according to Bryan Keane, the U.S. compliance officer at Transak.

Keane told Cointelegraph:

“Hawaii’s recent regulatory decision creates the potential for it to emerge as a significant crypto hub. The state’s interpretation of money transmission in regards to cryptocurrency sets the stage for broader adoption, aligning well with the enthusiastic and growing Web3 community in the region.”

This development is a positive sign for companies like Transak, which can now offer more comprehensive crypto payment services in Hawaii without relying on third-party solutions.

Despite this recent progress, Hawaii was not always seen as a crypto-friendly regulatory environment.

In 2019, the state established the Digital Currency Innovation Lab (DCIL) to create a regulated sandbox for crypto companies to operate in while gathering operational data.

The four-year sandbox ended in June, shortly before Hawaii’s regulatory agencies announced that crypto company operations would not be categorized as money transmission under state law.

This regulatory change has drawn numerous notable Web3 firms, including MetaMask, Transak, BitPay, and Trust Wallet. Web3 payment infrastructure provider Transak also announced its official launch in Hawaii on September 12, in a statement shared with Cointelegraph.

Transak’s Keane believes that, due to this regulatory shift, Hawaii could become an important part of the broader crypto economy:

“With the regulatory landscape now aligned with our operational strengths, we see it becoming a pivotal market not just for Transak, but for the broader crypto ecosystem… This enhanced capability is a significant advantage, making Hawaii a hot spot for crypto innovation and a strategic foothold in the US.”

Keane further explained that Hawaii’s new regime could be particularly appealing to small businesses due to the complexities involved in obtaining a money transmitter license in the U.S.:

“Obtaining a money transmitter license (MTL) in the US is complex! Each state imposes different rules and requirements, and often different definitions of what money transmission even is.”

Sources:

https://cointelegraph.com/news/hawaii-emerging-crypto-hub-new-crypto-regulations

https://cryptorank.io/news/feed/e9911-hawaii-issues-new-regulation-as-it-becomes-newest-crypto-hub