Hawaii’s Senate is now considering a new bill that would allow the state’s banks to provide digital asset custody services. The bill was introduced a week ago, received its first reading on January 21, and has now been referred to two committees: Consumer Protection and Health, and Judiciary and Commerce.
The bill, introduced with the backing of five state senators, defines custodial services and establishes the requirements for banks that want to provide those services to their customers. Those services include management of customer digital assets, fund administration, and executing instructions from customers.
To qualify, banks will need to meet standards for internal controls, accounting, and IT best practices. In addition, they will need to ensure that their custody and management of digital assets can comply with all relevant anti-money laundering and KYC standards.
The bill is also notable for its attempt to provide a more uniform legal status for the assets in question. If passed, it will classify cryptocurrencies and other digital assets under the terms of the Uniform Commercial Code, with subclassification as digital securities, virtual currencies, or digital consumer assets.
The proposed legislation also includes language dealing with smart contracts, authorizing courts to deal with cases involving digital currencies, and more.