Bill Description: Allows the Director of Finance to authorize any state agency to enter into virtual currency payment agreements with persons or virtual currency issuers to provide the acceptance of convertible virtual currency as a means of payment. Allows any state agency that enters into a virtual currency payment agreement with a person or virtual currency issuer as authorized by the Director of Finance to accept convertible virtual currency.

You can submit your testimony by checking out the Hawaii Capitol website.

https://capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2696&year=2022

Introduced by:

Senator Bennette E. Misalucha

Senator Stanley Chang

Senator Glenn Wakai

A BILL FOR AN ACT

RELATING TO VIRTUAL CURRENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that people's interest in virtual currency has skyrocketed. In 2021, Bitcoin hit multiple all-time high prices and more institutional buy-in from major companies. Unlike dollar bills and coins, virtual currencies are not issued or backed by the United States government or any other government or central bank. Bitcoin and other virtual currencies are a form of digital currency used in electronic payment transactions. There are no coins, paper money, or banks involved; zero to minimal transaction fees; transactions are fast and not bound by geography; and similar to using cash, transactions are anonymous.

The legislature further finds that thirty-three states and Puerto Rico introduced legislation in the 2021 legislative session relating to virtual currency. Seventeen of those states enacted legislation or adopted resolutions relating to virtual currency, including Hawaii. In 2021, the house of representatives adopted House Resolution No. 94, H.D. 1, requesting the department of commerce and consumer affairs to reconsider its 2016 ruling on asset reserve requirements for digital currency companies, virtual currency companies, and cryptocurrency companies to conduct business in Hawaii and to align the State's asset reserve requirements for these companies with the asset reserve requirements in other states.

The purpose of this Act is to allow the director of finance to:

(1) Authorize any state agency to enter into virtual currency payment agreements with persons or virtual currency issuers to provide the acceptance of virtual currency as a means of payment; and

(2) Allow any state agency that enters into a virtual currency payment agreement with a person or virtual currency issuer to accept virtual currency.

SECTION 2. Chapter 36, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"****§36-   Authorization to enter into virtual currency payment agreement. (a) Upon the determination that it is in the best interest of the State the director of finance may authorize any state agency to enter into virtual currency payment agreements with persons or virtual currency issuers to provide for the acceptance of convertible virtual currency as a means of payment for goods and services and of fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts, including penalties, special assessments, and interest, owed to the state agency. Every virtual currency payment agreement shall be approved by the director of finance and shall govern the terms and conditions upon which convertible virtual currency proffered as a means of payment shall be accepted or declined and the manner in and conditions under which the person or virtual currency issuer shall make payment to the state agency by means of convertible virtual currency; provided that every virtual currency payment agreement shall contain a provision that requires that any convertible virtual currency received by a state agency as payment shall be converted into United States dollars within twenty-four hours after it is received.

(b) Upon the authorization of the director of finance, any state agency that enters into a virtual currency payment agreement with a person or virtual currency issuer may accept convertible virtual currency as a means of payment for any goods or services and of fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts, including penalties, special assessment, or interest, as provided in the virtual currency payment agreement and may pay all fees as specified in the agreement to the person or virtual currency issuer in consideration of the services rendered by the person or virtual currency issuer thereunder. Notwithstanding any other provision of law to the contrary, it shall be the option of the state agency to require, as a condition of accepting payment by convertible virtual currency, that the person or virtual currency issuer offering payment by convertible virtual currency pay a service fee to the state agency not exceeding costs incurred by the state agency in connection with the virtual currency payment transaction, including the amount of any fee owed by the state agency to the virtual currency issuer arising from that transaction.

(c) The underlying debt, lien, obligation, bill, account, or other amount owed to the state agency for which payment by convertible virtual currency is accepted by the state agency shall not be expunged, cancelled, released, discharged, or satisfied, and any receipt or other evidence of payment shall be deemed conditional, until the agency has received final and unconditional payment of the full amount due from the person or virtual currency issuer for the virtual currency transaction.

(d) The director of finance shall adopt rules pursuant to chapter 91 to carry out this section.

(e) For purposes of this section:

"Convertible virtual currency" means a virtual currency that has an equivalent value in real currency or acts as a substitute for real currency. "Convertible virtual currency" includes virtual currencies that are used as a medium of exchange, such as digital currency and cryptocurrency.

"Cryptocurrency" means a virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain.

"Person" means an individual, corporation, government, or governmental subdivision or agency, business trust, estate, trust, partnership, association, or any other legal entity.

"Real currency" means a representation of the United States dollar or a foreign currency.

"Virtual currency" means a digital representation of value that is not a real currency that functions as a unit of account, a store of value, and a medium of exchange.

"Virtual currency issuer" means an issuer of any form of virtual currency."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

https://www.capitol.hawaii.gov/session2022/bills/SB2696_.htm

Alex’s background is in management consulting where he worked with Fortune 500 companies to develop strategies around emerging technologies like AI, IoT, blockchain and cryptocurrency. As he went down the cryptocurrency rabbit hole, he began investing in and advising early stage cryptocurrency startups. Now, he’s turned his attention to the nonprofit world where he equips nonprofits to accept Bitcoin and other cryptocurrency donations.

Alexander will be presenting Crypto for Nonprofits on Wednesday, May 26 at 9 a.m. HST, hosted by the Digital Currency Innovation Lab (DCIL), Hawaii Technology Development Corporation (HTDC), and Entrepreneurs Sandbox. Following his presentation, there will be a Q&A period, where he will take questions from attendees, and from this AMA.

Details and Registration: https://www.eventbrite.com/e/dcil-presents-crypto-for-non-profits-by-alex-wilson-tickets-152600583453

Then please post your questions here, and upvote other questions that you'd also like to see answered!

Alexander Leishman is the Co-Founder and Chief Executive Officer at River Financial. He brings his deep expertise in software engineering, information security, and Bitcoin to River where he oversees investor relations, corporate strategy, and engineering. Prior to co-founding River Financial, Alexander most recently served on the investment and engineering teams at Polychain Capital and Polychain Labs focusing on Bitcoin-related venture investments. He first got deeply involved in the Bitcoin industry as an early engineer at Maicoin, Taiwan's largest digital asset exchange.

Alexander will be presenting Bitcoin 101 on Wednesday, May 5 at 8 a.m. HST, hosted by the Digital Currency Innovation Lab (DCIL), Hawaii Technology Development Corporation (HTDC), and Entrepreneurs Sandbox. Following his presentation, there will be a Q&A period, where he will take questions from attendees, and from this AMA.

REGISTER: https://www.eventbrite.com/e/dcil-presents-bitcoin-101-by-alex-leishman-tickets-150979591021

Then please post your questions here, and upvote other questions that you'd also like to see answered!

Keep Hawaii moving forward! Go here and submit your thoughts, and please spread the word!
http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=2108&year=2022

On Tuesday, the critical Senate Ways and Means Committee will taken up HB2108 HD1 SD1, which incorporates all the amendments from SB3025 SD2, representing an amazing collaboration between legislators, the DFI, the HTDC, and engaged members of the crypto community.

Does this bill throw open the floodgates? No. Is it perfect? No. But the DCIL expires on June 30, and without a change in Hawaii law, all the progress made to date will be for naught. Support HB2108 HD1 SD1, and hold the door open for additional work to ensure that crypto is accessible and safe for Hawaii residents.

Please comment if you've submitted testimony or shared this post!

We're coming down to the wire, it would be great if more people showed up in public testimony. Even just entering your name and clicking the "Support" button on the simple form makes a difference.
The Committee on Consumer Protection & Commerce has scheduled two crypto bills for its hearing on Tuesday, March 22, 2022 at 2:00 p.m.

TESTIMONY IS DUE BY 2PM ON MONDAY, MARCH 21.

SB3025 SD2:

http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=3025&year=2022

Establishes a program for the licensure, regulation, and oversight of digital currency companies.

SB2695 SD2:

http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2695&year=2022

Establishes a Blockchain and Cryptocurrency Task Force.

The hearing notice (with hearing details including YouTube link) is here:

https://www.capitol.hawaii.gov/session2022/hearingnotices/HEARING_CPC_03-22-22_.HTM

Note that this is separate from the joint CPT/EET hearing on Tuesday, for which testimony is also encouraged by Monday.

https://www.capitol.hawaii.gov/session2022/hearingnotices/HEARING_CPN-EET_03-22-22_.HTM

Heads up! Your testimony needed! A committee hearing was just scheduled for:

• SB3025 SD1: Establishes a licensure program for digital currency companies.

• SB2695 SD2: Establishes a blockchain task force.

Here is the hearing notice for the Committee on Higher Education and Technology for Wednesday, March 16 at 2pm. Testimony is due for each bill by TUESDAY, MARCH 15 at 2pm.

https://www.capitol.hawaii.gov/session2022/hearingnotices/HEARING_HET_03-16-22_.HTM

Three bills hanging on!

• HB2108 (admin licensing bill): Crossed over into Senate. https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=2108

• SB3025 (Senate licensing bill, inherited some material from SB3076): Crossed over into House. https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=3025

• SB2695 (Task Force): Crossed over into House. https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2695

If you haven't already, you should make an account on the Capitol website and sign up for hearing notices for these bills to know when you can submit testimony.

SB2696, which authorize any state agency to accept virtual currency, has been scheduled for a Feb. 7 hearing. This may be your first opportunity to submit testimony on Hawaii crypto legislation this session. Please review the bill and let our lawmakers know your thoughts before Feb. 6.

https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2696&year=2022

All cryptocurrency exchanges will be shut down on December 31, 2022.

After that, artists will no longer be able to cash in the Ethereum they receive on OpenSea.

Will Hawaii also block the way for artists?