State Senators Gil Riviere (D-23), Sharon Moriwaki (D-12), Stanley Chang (D-9), Les Ihara (D-10) and Kurt Fevella (R-19) sponsored the bill.
Hawaiian lawmakers have submitted a bill that allows banks to provide custody for digital assets.
SB2594, introduced on Jan. 18 with bipartisan backing, 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.
In effect, the bill could clear the way for Hawaiian banks to offer digital services alongside their existing ones. U.S. banks have long balked at touching bitcoin and other cryptocurrencies, fearing regulatory uncertainties and the assets’ at times illicit associations could spell trouble down the line.
But the troubles go a step further in Hawaii, where even crypto-focused money services struggle to function. That’s because the Hawaii Division of Financial Institutions requires crypto-licensed entities hold fiat reserves equal to their virtual currency holdings, a decision Coinbase said led to its shuttering of operations in the state in 2017.
This legislative effort does not appear to end the “double reserve” problem, as Coinbase has called it. But it would, conceivably, give some legal clarity to Hawaiian banks.
The bill’s language describes a low-cost, at times pro-consumer custodial system that could come online 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.”
Handshake’s Uncensorable Web Domains Go Live on Mainnet
Namebase CEO Tieshun Roquerre joins @nlw to talk about why uncensorable web domains matter as Handshake goes live to mainnet.As claims of election tampering, fraud and other dubious activities fly around the botched Democratic Caucus in Iowa, trust in our public institutions continues to crater.
The question of trust and censorship are at the heart of our episode today. Handshake is a new protocol for uncensorable web domains. The goal is to create a blockchain-based Top Level Domain system governments can’t censor or block.
To explain why Handshake (HNS) matters, @nlw is joined by Tieshun Roquerre, the CEO of Namebase, a next-generation domain registrar for HNS.
Hamstringing an Industry With Compliance Costs
Between Kraken’s $1 million spend on subpoena responses in 2019 and stories like the $2 million it cost Blockstack to raise $23 million in an SEC-compliant token sale (8.7 percent of the raise), it begs the question: Will compliance costs fundamentally limit innovation by demanding big war chests to play? Will the most successful companies be those that (like Block One) simply raise enough to pay off the regulators on the back end?Later, we look at new mining interests in Texas, what it means for American mining and bitcoin mining in the lead up to the halving more broadly. Finally, we’ll dissect an op-ed from the IMF’s chief economist on the strength of the dollar over digital alternatives.
Kraken annual transparency report shows off growing regulatory inquiries and increasing cost of compliance
New global interests in giant Texas-based bitcoin mining operation
The IMF’s chief economist on why digital currencies don’t threaten the dollar’s global reserve currency status
