DCIL FAQs 05.05.22

Frequently Asked Questions[1]
The Future of the Digital Currency Innovation Lab

Question: I heard the Digital Currency Innovation Lab will close on June 30, 2022.  I bought digital currency from a company in the Digital Currency Innovation Lab (DCIL).  Do I need to close my account on June 30, 2022?
          Answer: The DCIL is a two-year research program created by the Hawaii Division of Financial Institutions (HDFI) and the Hawaii Technology Development Corporation (HTDC) in 2020.  In accordance with the disclosures, the DCIL is scheduled to close for transactions on June 30, 2022 for Hawaii residents.  The disclosures explained that transactions allowed from July 1, 2022 to December 31, 2022 should be to close accounts or wind down accounts.

Question: I heard the legislature was considering a bill that would establish a license for digital currency companies so that the companies in the DCIL could continue to operate in Hawaii.  What happened to that bill?
            Answer:  The legislature did review and consider three bills that would have established a licensing program of digital currency companies.  After consideration, the legislature decided not to pass the measure during this session.  This means there is no special licensing program for these companies.

The impact of this decision on the DCIL is for the project to close as originally intended.  However, the HDFI and HTDC are evaluating options for the DCIL in an attempt to mitigate consumer harm.

 Question: Is it reasonable to close the DCIL with 134,500 customers participating in the DCIL?
            Answer:  The HDFI and HTDC are evaluating options for the DCIL in an attempt to mitigate consumer harm.  All participating residents were provided a disclosure at onboarding that the duration of the DCIL was limited and it would end on June 30, 2022.

Question: What will happen once the DCIL closes?  Are companies allowed to offer cryptocurrency?
            Answer:  The HDFI does not prohibit cryptocurrency activity.  The current HDFI guidance says that cryptocurrency transactions are covered by our money transmission law, and companies need to get that license.  There are licensed companies that offer cryptocurrency activity; however, HDFI does not maintain a separate a list of those companies.

Question: What if I still choose to use the services (after June 30, 2022) provided by a company that is not a part of the DCIL but continues to serve Hawaii’s residents?
          Answer:  Currently, companies offering digital currency services in Hawaii are required have a money transmitter license.  If a company is offering digital currency without a money transmitter license or is not part of the DCIL, DFI considers that activity as unlicensed.  DFI reserves the right to take appropriate enforcement action against the company.  If a Hawaii resident was able to open an account with a digital currency service provider that is not licensed, the resident does so at his/her own risk.
The DFI and HTDC are considering options to mitigate consumer harm after June 30, 2022, when the DCIL is scheduled to close; however, customers were notified about the DCIL parameters.

[1] Frequently Asked Questions 05.05.22