Hawaii Exempts Crypto Firms from Money Transmitter License Requirement

In a notable advancement for the cryptocurrency sector, Hawaii has officially exempted crypto firms from needing a Money Transmitter License (MTL) to operate within the state. This decision follows the conclusion of the Digital Currency Innovation Lab (DCIL) project, a collaborative research initiative launched in 2020 to explore Hawaii’s digital currency landscape and evaluate the regulatory framework for crypto-related businesses.
On June 30, 2024, the Hawai‘i Department of Commerce and Consumer Affairs (DCCA) announced the end of the DCIL project, clarifying that digital currency companies will no longer require a Hawai‘i-issued MTL to conduct business in the state. Instead, these companies can continue their operations as unregulated businesses, subject to applicable federal licensing or registration requirements.
Although the MTL exemption may be a relief for crypto firms in Hawaii, these companies must still comply with various federal regulations. This includes adhering to requirements from the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA), among others.
Crypto firms in Hawaii must also follow federal regulatory requirements related to consumer protection, Anti-Money Laundering measures, and other pertinent regulations. While the state no longer requires a specific license, crypto businesses must still operate legally and ethically under stringent guidelines.
The DCIL project, initiated in 2020, aimed to explore Hawaii’s rapidly evolving digital currency landscape and assess the regulatory framework necessary to support innovation while protecting consumers. The project’s completion represents a significant milestone in the state’s efforts to create a clear and supportive regulatory environment for crypto businesses.
By exempting crypto firms from the MTL requirement, Hawaii aims to foster innovation and growth in the digital currency sector while ensuring compliance with federal regulations. This move is expected to attract more crypto businesses to the state, boosting Hawaii’s economy and solidifying its position as a hub for fintech innovation.