HB 2257 Summary

• Extends Hawaii's Money Transmitters Act (Chapter 489D) to regulate persons engaged in transmission, transfer, exchange, storage, and issuance of virtual currency by adding five new definitions: "exchange," "money," "store/storage," "transfer," and "virtual currency."

• Requires licensees dealing with virtual currency to obtain customer agreement to a standardized warning notice disclosing that virtual currencies are not backed by physical commodities, governments, or FDIC insurance, and that customers face potential total loss of their virtual currency.

• Permits licensees involved in virtual currency storage or transfer to maintain like-kind virtual currency as permissible investments equal to outstanding payment obligations, as an alternative to traditional permissible investments.

• Requires applicants whose business model transfers or stores virtual currency on behalf of others to provide a third-party security audit of all electronic information and data systems acceptable to the commissioner.

• Effective July 1, 2050.