March 19, 2020 Hawaii has launched a two-year regulatory sandbox for cryptocurrency businesses.

The state of Hawaii announces a new two-year regulatory sandbox, termed the “Digital Currency Innovation Lab”, for cryptocurrency businesses. The Department of Commerce’s Division of Financial Institutions (DFI), and the Hawaii Technology Development Corporation (HTDC) are in charge of the policy at the same time as the state looks to devise new legislation. The announcement means that companies conducting business in cryptocurrency will be exempt from Hawaii’s money transmitter license and double-reserve rule. The rule had meant that companies must maintain an equivalent amount of fiat currency to their cryptocurrency reserves. This requirement was cited by Coinbase as its motivation for closing operations in Hawaii. According to the DFI, the sandbox is designed to entice businesses back to the state while ensuring consumer protection and that it would allow regulators to devise a new body of legislation that is supportive of cryptocurrencies.