Crypto Custody Is Offered To Banks By Hawaii
By Luke Flowers – Crypto Broker
It seems that Hawaii is making moves to enable virtual assets to be kept in the custody of authorized banks. This January 17th, a bill was brought into consideration by the senators of five states, as detailed through Cointelegraph. It then passed its first reading on January 21st to then be referred to the committees working on Judiciary and Commerce as well as to Consumer Protection and Health on January 23rd.
Custody for Cryptocurrency
The bill includes specifications regarding the custodial services for digital assets, a set of provisions that banks must adhere to. However, the custodial services will include the security and organisation of customers’ digital assets/currency. Specific laws have not yet been introduced but all applicants will need to comply with federal Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements to incorporate these cryptocurrencies within a banking service.
Crypto-assets can be classified under three sub-categories, Consumer Assets, Virtual Currencies and Digital Securities. When a user is buying crypto, it usually has its own consensus and protocol that makes it unique. Though each will have their own regulations, all will be classified as intangible personal property. Security maintenance is extremely essential for the effectiveness of the network, for this reason, the bill has specified smart contracts and multi-signature displays.
Three years back, Hawaii imposed greater restrictions on firms engaging with cryptocurrencies. This led to the Coinbase exchange ceasing operation in the state and relocating. If the current bill gets passed, there will be clarity, safety and arrangement and could encourage more firms to move to the state, hopefully encouraging people to buy and sell crypto. Many banks can operate as a crypto custodian, this might aid Hawaii in reaching a regulated industry of cryptocurrency and becoming a place for trusted Bitcoin and other altcoins.
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