Hawaii should jump into cryptocurrency trading
Last month, a U.S. Senate bill was passed that will impose tax compliance for cryptocurrency exchanges, but Hawaii remains on the sidelines of this economic booster.
The infrastructure bill included language that would help ensure that cryptocurrency exchanges hold their users accountable so that the federal government can collect sales taxes in the same way capital gains are collected after. the sale of a share.
The cryptocurrency market topped $ 2 trillion this year and senators hope to earn $ 28 billion in tax revenue.
Thanks to a 2016 decision by the Department of Commerce and Consumer Affairs, cryptocurrency exchanges became classified as money transmitters in the same way that Western Union is classified.
This means that cryptocurrency exchanges must have a guarantee on both sides of the transaction to ensure that the money can be sent quickly.
It works for businesses like Western Union where people need money wherever the money is sent, but it’s a burden for cryptocurrency exchanges where users generally buy and hold cryptocurrency as an investment. .
The high levels of collateral required to facilitate the purchase of investments mean that this regulation effectively prohibits cryptocurrency trading in Hawaii.
Last year, the United States House of Representatives proposed a bill allowing banks to act as custodians of digital currencies, but the bill has yet to be passed.
The State of Hawaii also launched a Digital Currency Innovation Lab, so cryptocurrency companies would not need to obtain a state money transmitter license until by June 30, 2022, but they will have to obey other sections of the laws on money transmitters. So far, 11 cryptocurrency companies operate in this limited capacity.
As of this writing, major exchanges like Binance and eToro do not operate in Hawaii. It is also telling that Coinbase left after the 2016 decision and has not returned.
The Hawaii Department of Business, Economic Development, and Tourism estimates that it will be until 2023 for Hawaii’s economy to reach the size it was in 2019.
Meanwhile, some cryptocurrencies plan to handle 1 million transactions per second.
It’s time for the State of Hawaii to learn a lesson from the speed of cryptocurrency innovation and give citizens full access to digital assets.