Hawaii Banks To Be Crypto Custodians

CoinDesk reports that Hawaiian lawmakers have submitted a bill that allows banks to provide custody for digital assets.

The bill has bipartisan backing, and when it was introduced on Jan. 18, state legislators said it would make it legal for Hawaiian banks to hold “digital securities,” “virtual currencies,” “digital consumer assets” and other “open blockchain tokens” for their customers. It would further authorize Hawaiian courts to hear digital asset claims.

There is a hope that this will help bring cryptocurrency focused money services because the Hawaii Division of Financial Institutions requires crypto-licensed entities hold fiat reserves equal to their virtual currency holdings, which was a major reason for the decision Coinbase made to leave in 2017.

The bill is described as a low-cost, pro-consumer custodial system. It could come online as soon as 60 days after passage. Banks would be required to pay a $1 annual fee and hire an independent accountant to examine their digital books.

Customers could also authorize their custodians to transact with their digital assets. They would need to agree to the “source code version” the banks would utilize, with statutory ambiguities “resolved in favor of the customers.”

This article is not intended to be financial advice. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Crypto Block does not provide investment, tax, legal, or accounting advice.

As always, do your due diligence before investing, and never invest more than you can afford to lose.

Photo credit: Shutterstock

4 views0 comments

Recent Posts

See All