HAWAII, USA – One of the United States’ 50 states, Hawaii, will be able to offer digital asset upholder services to depositors under a new law. Once it’s approved, banks in the said country will have the right to cryptocurrencies.
Hawaiian banks will be capable of providing custodial services to cryptocurrency depositors after the new bill has been approved. The lawmakers of the state presented the bill in the previous week.
Once the bill is approved, the regulation might grant banks in Hawaii the right to manage and hold digital assets like digital securities, cryptocurrencies, and digital consumer assets for their clients.
The mentioned bill already passed the initial reading, which happened on Tuesday, January 21. It’s co-sponsored by numerous senators, and included on the list are Senator Stanley Chang, Senator Sharon Moriwaki, The Democratic Caucus Senator Les Ihara, and the Republican Party Senator Gil Riviere.
Regarding the bill, all digital assets will be considered intangible assets. On the other hand, virtual consumer assets will be observed as general intangible ones. Digital securities will be measured by both investment and securities property. Furthermore, digital currencies will be seen as money.
As digital assets are observed as intangible properties, these may be treated as funding assets as well under section 420:28 to 102. However, it should have a written contract with the digital asset owner, as per the bill.
The regulatory vagueness surrounding digital assets have dejected several banks from dealing with cryptocurrencies in the United States or the US. However, lawmakers in Hawaii are set to alter it with the mentioned bill.
The legislation might need banks interested in being cryptocurrency custodians to meet the necessities of a “securities intermediary.” The banks might also require to give a 60-day written warning to the officer and settle a yearly $1-supervision fee. Furthermore, once banks begin to provide custodial services, these might need to employ an automatic public accountant to investigate their virtual records.
Another section said that the bank and virtual assets owner might sign a written contract that covers how long the banks might manage and safeguard the virtual assets, as well as when these will be returned. Throughout the period wherein a bank might perform as a custodian, the client may approve the bank to cooperate with the virtual assets.
After passing the first reading, the bill was referred to both the Senate Committee on Judiciary (JDC) and the Senate Committee on Commerce, Consumer Protection and Health, (CPH) for further discussion. However, the bill has a lengthy way to go.