Hawaii’s newly enacted cryptocurrency regulations are making the state increasingly appealing to crypto companies, with firms like MetaMask and Transak now setting up offices there.
In June, regulators jointly announced that the business activities of crypto companies should not be classified as money transmission under Hawaii law.
As of July 1, 2024, cryptocurrency exchanges and firms are no longer required to obtain a money transmitter license to operate in the state, which is in stark contrast with most US states.
This could attract many notable crypto firms back into the state, according to Bryan Keane, the US compliance officer at Transak.
“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.”
The new regulatory development is a welcome sign for companies like Transak, which can now offer more comprehensive crypto payment services in the state without relying on third-party solutions.
Despite the recent regulatory leap forward, Hawaii wasn’t always considered a crypto-friendly regulatory region.
In 2019, Hawaii established the Digital Currency Innovation Lab (DCIL) to provide a regulated sandbox environment for crypto companies to operate while gathering operational data about them.
The four-year sandbox was concluded in June, shortly before Hawaii’s governing regulatory agencies announced that crypto firm operations would not be classified as money transmission under Hawaii law.
The regulatory shift attracted numerous notable Web3 firms including Metamask, Transak, BitPay and Trust Wallet. Web3 payment infrastructure provider Transak has also announced its official launch in Hawaii on Sept. 12
Thanks to the regulatory shift, Hawaii could become a key part of the wider crypto economy, according to Transak’s Keane, who added:
“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.”
Small businesses could find Hawaii’s new regime particularly attractive due to the complexity associated with gaining a money transmitter license in the US, explained Keane:
“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.”
Coinbase has also expanded its services to Hawaii at the beginning of August, thanks to the easing regulatory regime.
