THE SENATE

S.B. NO.

2853

TWENTY-NINTH LEGISLATURE, 2018

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to money transmitters.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. The legislature finds that since the enactment of the State's Money Transmitters Act in 2006, codified as chapter 489D, Hawaii Revised Statutes, technological innovation has given rise to digital forms of currency that can be bought and sold as a form of money exchange. Transmission of this virtual currency, also known as cryptocurrency, appropriately falls under chapter 489D, Hawaii Revised Statutes, thus providing the State with a mechanism to regulate these transmissions and protect consumers. However, amendments to the Money Transmitters Act are necessary to address certain idiosyncrasies of virtual currency transmissions.

The purpose of this Act is to define "virtual currency" under the State's Money Transmitters Act and amend certain requirements that are unsuitable for virtual currency transmissions.

SECTION 2. Section 489D-4, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Virtual currency" means any type of digital unit that is used as a medium of exchange or a form of digitally stored value or that is incorporated into payment system technology. The term "virtual currency" shall be broadly construed to include digital units of exchange that have a centralized repository or administrator, are decentralized and have no centralized repository or administrator, or may be created or obtained by computing or manufacturing effort.

The term "virtual currency" shall not be construed to include digital units that are used solely within online gaming platforms with no market or application outside these gaming platforms, or used exclusively as part of a consumer affinity or rewards program and can be applied solely as payment for purchases with the issuer or other designated merchants but cannot be converted into or redeemed for fiat currency."

SECTION 3. Section 489D-8, Hawaii Revised Statutes, is amended to read as follows:

"489D-8 Permissible investments and statutory trust. (a) A licensee, at all times, shall possess permissible investments having an aggregate market value, calculated in accordance with generally accepted accounting principles, of not less than the aggregate amount of all outstanding payment obligations. This requirement may be waived by the commissioner if the dollar volume of a licensee's outstanding payment obligations does not exceed the bond or other security devices posted by the licensee pursuant to section 489D-7.

(b) Permissible investments, even if commingled with other assets of the licensee, shall be held in trust for the benefit of the purchasers and holders of the licensee's outstanding payment obligations in the event of the bankruptcy of the licensee.

(c) This section shall not apply to money transmissions of virtual currency."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2018.

 

INTRODUCED BY:

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Report Title:

Money Transmitters; Virtual Currency

 

Description:

Defines "virtual currency" within the Money Transmitters Act. Clarifies that the permissible investment requirements for money transmitter licensees shall not apply to money transmissions of virtual currency.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.