H.C.R. NO.














REQUESTING THE DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS TO RECONSIDER ITS 2016 RULING on asset reserve requirements for VIRTUAL CURRENCY COMPANIES AND CRYPTOCURRENCY COMPANIES TO CONDUCT BUSINESS IN HAWAII and to align the State's asset reserve requirements for these companies with the asset reserve requirements in other states.




     WHEREAS, cryptocurrency is an evolving technology globally with much still to be explored and assessed; and


     WHEREAS, both cryptocurrency and virtual currency are forms of digital currency, which is the blanket term used to describe all electronic money; and


     WHEREAS, according to the Federal Trade Commission, cryptocurrency is digital money, which means there is no physical coin or bill; rather, cryptocurrency is stored in a digital wallet, and either online, on a computer, or on other hardware; and


WHEREAS, cryptocurrencies are not issued or backed by the United States government or any other government or central bank; and


     WHEREAS, in 2016, the Department of Commerce and Consumer Affairs' Division of Financial Institutions issued requirements for applicants that trade, transmit, or store digital currency in the State, including subjecting digital currency companies to licensing, asset reserve, and financial statement requirements, and indicated that digital currency value is not a permissible investment under the Money Transmitters Act; and


     WHEREAS, the 2016 Division of Financial Institutions' requirements interpreted state law governing money transmitter businesses as applying to digital currency companies, which subjected these companies to licensing and asset reserve requirements that were too burdensome for them to do business in Hawaii; and


     WHEREAS, the Division of Financial Institutions' asset reserve requirements for digital currency companies are not consistent with other states; and


     WHEREAS, the Digital Currency Innovation Lab pilot program was created through a partnership between the Division of Financial Institutions and Hawaii Technology Development Corporation; and


WHEREAS, under the Digital Currency Innovation Lab pilot program, it is illegal for digital currency companies to allow Hawaii-based consumers access to their platforms without a license unless a digital currency company is in the Digital Currency Innovation Lab; now, therefore,


     BE IT RESOLVED by the House of Representatives of the Thirty-first Legislature of the State of Hawaii, Regular Session of 2021, the Senate concurring, that the Department of Commerce and Consumer Affairs is requested to reconsider its 2016 ruling on asset reserve requirements for virtual currency companies and cryptocurrency companies to conduct business in Hawaii and to align the State's asset reserve requirements for these companies with the asset reserve requirements in other states; and


     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of Commerce and Consumer Affairs; Commissioner of Financial Institutions; and Executive Director and Chief Executive Officer of the Hawaii Technology and Development Corporation.







Report Title: 

DCCA; Division of Financial Institutions; Digital Currency; Virtual and Cryptocurrency Companies; Asset Reserves; Money Transmitters Act