Digital Currency Innovation Lab FAQs (Companies)

  • Why was the Digital Currency Innovation Lab created?
    • The Hawaii Division of Financial Institutions (DFI) determined that based on its current statutory language, a person is engaged in providing money transmission* if the person provides those services to persons in the State, even if the person has no physical presence in the State. DFI wanted to address the concerns individuals and companies raised in not being able to meet the statutory requirements in the money transmitter law.
    • In addition to addressing these concerns, the Digital Currency Innovation Lab is expected to:
      1. Create economic opportunities for Hawaii through early adoption of digital currency
      2. Offer consumer protection by providing guidance to issuers of digital currency
      3. Provide data to shape legislation supporting digital currency
    • *Money transmission refers to the engagement in the business of (1) selling or issuing payment instruments or (2) receiving money or monetary value for transmission to a location within the United States by any and all means, including wire, facsimile, or electronic transfer.
  • Who is DFI?
    • DFI stands for the Division of Financial Institutions and is situated within the Department of Commerce and Consumer Affairs (DCCA). DFI ensures the safety and soundness of state-chartered and state-licensed financial institutions, and ensures regulatory compliance by state-licensed financial institutions, escrow depositories, money transmitters, mortgage servicers, mortgage loan originators and mortgage loan originator companies, by fairly administering applicable statutes and rules, in order to protect the rights and funds of depositors, borrowers, consumers and other members of the public. For more information, visit
  • Why is HTDC and DFI partnering to launch the Digital Currency Innovation Lab?
    • DFI is the authority on compliance and regulation of financial institutions in the State. DFI licenses, supervises, and examine money transmitter companies.  Leveraging its expertise and combining it together with HTDC’s proficiency in technological developments and our mission to drive technology-based economic development, this partnership lays the foundation for an appropriate evaluation of digital currency deployment in the State.
  • As a digital currency issuer, what can I do in the Digital Currency Innovation Lab?
    • Digital currency companies admitted into the program can conduct digital currency transactions without enforcement action for what DFI would consider unlicensed activity under HRS Chapter 489D. However, the participant is still subject to other federal and state laws (see question on “exemption” for details).
  • What are the terms and conditions for companies to participate?
    • Through the issuance of a “no action” message”, DFI is not taking any enforcement action against these companies, which need a money transmitter license to operate under the current statutory scheme. For the duration of the DCIL, DFI will allow the digital currency companies admitted into the program to conduct business in Hawaii without first obtaining a state money transmitter license.
      The companies will be required to comply with other sections of the money transmitter laws related to financial condition, consumer protection and post appropriate disclosures about the duration of the DCIL. Other state and federal laws may apply.
  • Was any statutory authority needed to launch this Digital Currency Innovation Lab?
    • No. DFI is using its regulatory authority to provide an innovative way for digital currency transactions to take place. In turn, it will evaluate the best way to supervise this type of activity and determine if this type of activity should be supervised by DFI.  DFI will evaluate digital currency companies to determine the type of supervision and examination as appropriate.
  • What type of company can participate in the Digital Currency Innovation Lab?
    • Any company looking to engage in digital currency transactions in Hawaii can apply. Participation is determined through an evaluation process by DFI.
  • How and when can our company apply to participate?
    • The application period closed on May 1, 2020. Only companies named will be allowed to participate, unless the DCIL application process re-opens.
  • Does our company have to be a Hawaii business to participate?
    • No. The company must be registered to do business in the State with the Business Registration, Department of Commerce and Consumer Affairs.
  • Is there a limit to the number of customers our company can service in the duration of our participation?
    • No. There is no limit.
  • Is there a limit to the amount of digital currency transactions (in value) during the participation period?
    • No. There is no limit.  However, companies should anticipate that the pilot program is two years and plan for a wind down of the activity if legislation is not in place.
  • How long is the participation period in the Digital Currency Innovation Lab?
    • The DCIL ends June 30, 2022.
  • Can our company withdraw from the program before the two-year period?
    • Yes, a company may withdraw from the program with notification to DFI.  The withdrawal should include a plan for the winddown of the company’s activity with consumers.
  • If our company is applying to or admitted into the Digital Currency Innovation Lab, will DFI or HTDC provide me with legal advice?
    • No. DFI and HTDC cannot provide legal advice and does not represent individuals or businesses applying to or admitted to the Digital Currency Innovation Lab. Legal advice should be sought from a private attorney who understands this industry.
  • Is my company exempt from complying with all state and federal laws?
    • No. Although DFI has issued a “no action message” to take no action against companies conducting what DFI would consider unlicensed activity, other state and federal laws may apply. In addition, a company remains subject to all criminal and consumer protection laws, including the Consumer Protection Act, which prohibits deceptive practices. Hawaii state business license and tax laws will apply as well. Companies considering participation in the Digital Currency Innovation Lab should consult with an attorney to ensure compliance with all applicable federal and state laws.
    • See FinCEN guidance for more information: FIN-2019-G001.
  • Does my company need to provide a bond or minimum net worth to be admitted into the program?
    • Yes. A participating company admitted must have a net worth of no less than USD1,000 at all times. During the application process, the company must also demonstrate that consumers will be protected for the duration of the program. Factors such as the standing of your company (general and financial), AML/OFAC policy etc. will be taken into consideration to determine acceptance. Participants must also agree to cooperate with DFI in determining the necessary level of supervision and examination during the program.
  • How will DFI monitor the activity in the Digital Currency Innovation Lab?
    • Participants will be required to provide updates based on specifications laid out by DFI. A report which includes the following items must be submitted following the timeline stipulated by DFI:
      1. The number of transactions ending October 31, 2020
      2. The amount or value of transactions ending October 31, 2020
      3. The number of complaints received
      4. Any regulatory enforcement orders or pending regulatory enforcement orders
  • Our application got denied, can we re-apply?
    • You can re-apply if we have an upcoming round of admissions. Note that neither DFI nor HTDC will provide a reason for the rejection of your company’s application. Please note that the $500 application fee will not be refunded.
  • What happens after the two-year period?
    • Once the two-year period ends, participants must conclude all digital currency transactions unless explicit approval has been granted. Per the participation agreement, companies must also execute on the wind-down plan and exit strategy. DFI will determine the appropriate licensing for the company to continue operations, if applicable.
  • Who should I contact if I have a question about participation in the Digital Currency Innovation Lab?
    • You can send us an email at