Financial Institutions

Frequently asked Questions as of 02.09.24
The following are general questions and responses. If you have specific questions, please contact DFI at [email protected].

What digital currency activities/services can a company conduct in Hawai‘i without a money transmitter license?
Companies that provide digital currency services to the public may provide the following services without a money transmitter license (this list may change from time to time):
* Trading of digital currency or assets.
NOTE: exchanges/platforms that provide US$ denominated stored value accounts that are used exclusively for facilitating the purchase or sale of digital currency on the platform do not require a money transmitter license. This activity includes importing US$ into the platform from the customer’s external bank account and returning US$ to the customer’s external bank account. Any other use of the US$ stored value accounts (such as enabling US$ payments between platform participants or parties external to the platform), may require a money transmitter license for that activity.
*Providing hosted digital currency wallets or digital currency custodial services.
*Any digital currency activities that represent investments (such as lending, staking, etc.). However, such activities may be subject to other licensing or registration requirements.
*Issuing or redeeming stable coins.
*Issuing or redeeming proprietary tokens.
*Facilitating the use of proprietary tokens within a proprietary platform.
*Processing/facilitating digital currency payments within the blockchain environment.
*Payment processing involving digital currency.
*Transferring digital assets from one person to another.

What does this mean for companies that are engaged in both USD$ and digital currency activity?
Companies that conduct activity in US$ or other fiat currencies that meets the definition of money transmission (§489D-4, HRS (Definitions) will likely require a money transmitter license for that fiat-denominated activity if an exclusion (§489D-5, HRS) does not apply.

To the extent possible, the money transmitter licensing requirements will apply only to the activity that does not involve digital currency. For example, the permissible investment requirement will apply to the amount of US$ outstanding money transmission obligations, but not to obligations denominated in digital currency. However, the evaluation of a company’s financial soundness will consider the company’s entire financial situation.