HONOLULU (KHON2) — Hawaii’s crypto market almost took its last breath after House Bill 2108 was indefinitely deferred in early May. The bill would have established a program for the licensure, regulation and oversight of digital currency companies in the state.
Without its passing, the Digital Currency Innovation Lab (DCIL) was scheduled to close for transactions on June 30 for both businesses and consumers.
On Thursday, June 2, the Division of Financial Institutions, Department of Commerce and Consumer Affairs (“DFI”) and Hawaii Technology and Development Corporation (“HTDC”) announced a two-year extension of the DCIL.
The news was a sigh of relief for the cryptocurrency companies participating in the pilot program. It means they can continue to do business in Hawaii without having to first obtain a state money transmitter license, at least until June 30, 2024.
Ryan Ozawa, who serves as DCIL’s community engagement consultant, told KHON2 he was intrigued that the DFI’s commissioner was able to extend the pilot after saying it was not something that would have been possible without action by the legislature.
“It’s not clear to me what changed between the failure of the bill, and today’s announcement,” Ozawa said on Thursday. “However it was done, I gave the Commissioner credit in avoiding the significant consumer harm that would’ve been caused by the shut down of the pilot. It was perhaps too optimistic of her to expect the legislature to have acted after many years, even up against a serious deadline.”
“A number of puzzle pieces had to fit together in order to make the new DCIL happen, but I am glad we are able to pull it off,” Commissioner Iris Ikeda said in Thursday’s announcement.
The companies currently in the program have the option to continue into the extended version but will have to accept a new agreement and additional fees. Ozawa acknowledges that it’s not “all sunshine and rainbows” for these participants.
“After this near death experience I wonder if some of these companies will decide that the roller coaster isn’t worth it,” Ozawa said.
Those that choose to withdraw from the program will have to abide by the terms of the DCIL and wind down procedures starting on July 1 and concluding on Dec. 31.
“I can fully appreciate people who are concerned about the risks and high volatility of the space, but I do think it’s important to that residents have the opportunity to at least explore the possibilities of this next generation of technology,” said Ozawa.
As of Dec. 31, 2021, there were approximately 134,000 Hawaii consumers who transacted over $800 million in digital currencies through participating companies in the DCIL. The program will soon start accepting applications from new companies.
For more information about the DCIL, click here.