The US senate has recently passed a bill that would allow the government to collect taxes on crypto transactions. This was a monumental bill, which gave cryptocurrencies the relevance that it desperately needed. Furthermore, the bill would bring about regulation that is desperately needed throughout the market. So even if it is a temporary setback, more people will be able to make their way into the market.
However, despite the action taking place throughout the country, Hawaii has stayed on the sidelines of this decision. Despite the entire country taking advantage of this decision, Hawaii will not be able to.
This monumental decision is the same as the one made for stock options long ago. With each purchase of stock, the US government would make money off it. Therefore, it was an incredible way to stimulate the economy.
Furthermore, cryptocurrencies also managed to receive the same classification as the Western Union exchange. This classification means that they are now capable of transferring money from one wallet to the other without it being considered illegal. Of course, this also means that there has to be collateral on both sides of a crypto transaction.
This can work for something like Western Union where people are only using the service to trade. However, this can be quite difficult for cryptocurrencies as many traders hold onto their tokens as an investment.
But since the amount of collateral required for most of these transactions makes it difficult for cryptocurrencies to survive. Last year, a bill proposed by the US House of Representatives would essentially allow all of the banks to hold onto digital currencies similar to a custodian. However, the bill did not pass and is currently stuck in limbo.
While Hawaii has yet to implement any serious advancement towards crypto, they are working on the Digital Currency Innovation Lab. This new service will allow cryptocurrencies to operate without first getting a money transmitter license. But this will most likely take place sometime during the 2022, making it almost useless for current startups. They will also have to follow other money transmitter laws.
What is more surprising is that major crypto exchanges like eToro and Binance do not offer their services in Hawaii. Moreover, coinbase left the country in 2016, and has yet to return. And seeing how it is currently struggling, Hawaii’s own branches of the government estimate that it will finally reach the same heights as its economy from 2019 to 2023. On the other hand, most cryptocurrencies deal with $1 million transactions every second.