House Democrats in the Hawaii legislature are asking the state's marketplace regulator to end restrictive laws put in place against cryptocurrency businesses almost five years ago.
Under the current requirements, exchanges must hold an amount of fiat equivalent to the value of the cryptocurrencies their clients are holding.
"The 2016 … law governing money transmitter businesses … subjected these companies to licensing and asset reserve requirements that were too burdensome for them to do business in Hawaii," the bill reads.
Indeed, several exchanges including Coinbase left the state after the requirement was implemented.
"The Division of Financial Institutions' asset reserve requirements for digital currency companies are not consistent with other states," the bill reads. "Cryptocurrency is an evolving technology globally with much still to be explored and assessed."
The current regulatory regime requires companies to obtain a money transmitter license if they are providing financial instruments for the sale or transaction with those in Hawaii even if the business is not physically present in the state.
The department also requests applicants that trade, transmit or custody crypto in the State meet financial statement requirements and that crypto value is not seen as a "permissible investment."
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