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Hawaii’s recent regulatory changes are fueling the state's rise as a key player in the crypto sector. With firms like Transak and MetaMask expanding their operations, the state is quickly becoming a critical hub for blockchain innovation.
Hawaii Rises as a Crypto Hub
MetaMask and Transak are among the crypto startups that have established offices in Hawaii as a result of the state's recently passed cryptocurrency rules.
Crypto firms' commercial operations should not be deemed money transfer under Hawaii law, according to a joint announcement by authorities in June.
Unlike the majority of US states, this one has decided that Bitcoin exchanges and businesses do not need a money transmitter license as of July 1, 2024.
Crypto Firms Enticed by Hawaii's New Regulations
According to Bryan Keane, US compliance officer at Transak, this could entice numerous prominent crypto enterprises to return to the state.
To Cointelegraph, the compliance expert said:
“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.”
Businesses like Transak, who had to depend on third-party solutions before, can now provide more extensive crypto payment services in the state thanks to the new regulatory change.
There has been a regulatory leap forward in Hawaii, although the state wasn't previously seen as crypto-friendly.
A controlled sandbox environment for crypto firms to operate in while gathering operational data was established in 2019 by Hawaii's Digital Currency Innovation Lab (DCIL).
Hawaii’s Digital Currency Sandbox Ends
Just before the governing regulatory bodies in Hawaii announced that crypto company operations would not be categorized as money transfer under Hawaii law, the four-year sandbox came to an end in June.
Many prominent Web3 companies, such as Metamask, Transak, BitPay, and Trust Wallet, were drawn to the regulatory change. Transak, a provider of Web3 payment infrastructure, informed Cointelegraph that it will formally start in Hawaii on September 12th.
Keane of Transak predicted that, as a result of the change in regulation, Hawaii would play a pivotal role in the larger crypto economy. He further stated:
“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.”
According to Keane, small firms may be drawn to Hawaii's new policy because obtaining a money transmitter license in the US is notoriously complex:
“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.”
Crypto Firms Expand in Hawaii Post-Regulatory Shift
As a result of the loosened regulatory environment, Coinbase also extended its services to Hawaii at the start of August.
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