Residents of Hawaii, who for years have been prevented from accessing most cryptocurrency exchanges due to the state's longstanding restrictions, will again be able to use Coinbase, the company said Wednesday.
“With recent state regulatory changes paving the way, we can now bring our products and services to Hawaii and empower residents to participate in the crypto economy,” said Faryar Shirzad, chief policy officer for Coinbase, in a statement.
The company had pulled out of Hawaii in 2017 after the state's Division of Financial Institutions (DFI) placed onerous requirements on crypto companies seeking a license to operate there—specifically, that exchanges maintain one-to-one reserves of fiat currency for all crypto held on its platform.
Coinbase had said at the time that it would be “impractical, costly, and inefficient” to do so in an article that's no longer available online.
“No digital currency business—and frankly, no commercially viable business anywhere—has the capital to supplement every customer Bitcoin with redundant dollar collateral,” Coinbase legal representative Juan Suarez wrote then.
With most exchanges following Coinbase’s lead, leaving most Hawaii residents unable to access mainstream crypto services, state lawmakers attempted to pass legislation to clarify crypto regulations over several years. None made it to the governor’s desk.
Meanwhile, the state created a pilot program that allowed certain exchanges and crypto businesses to operate in the state with an exemption from the DFI.
However, Hawaii Gov. Josh Green announced in January that the pilot program would end effective July 30. And with it, the state’s efforts to separately regulate crypto.
“The findings from the project indicate that digital currency companies will no longer require a Hawaii-issued money transmitter license to conduct business within the state,” the governor's office explained at the end of June. “The companies will be able to continue transaction activity as an unregulated business.”
With today's announcement, Coinbase was complementary to Hawaii policymakers.
“We've worked diligently with local authorities to ensure we can enter the Hawaii market and welcome their innovative, responsible approach, which aligns with our goal of providing a safe and compliant environment for all,” Shirzad said.
Hawaii's lifting of its licensing requirement was also cited as the reason Robinhood expanded its services to the state last month.