Coinbase Reenters Hawaii After Seven Years Departure

Publicly traded crypto exchange Coinbase has announced its return to Hawaii after leaving the state for seven years. The latest action comes after Hawaii’s Department of Commerce and Consumer Affairs Division of Financial Institutions (DFI) implemented regulatory changes to allow crypto exchanges to operate.

Coinbase Returns to Hawaii

Returning to Hawaii will allow about 1.4 residents in the state to access digital assets and other products offered by the American crypto exchange. These functionalities allow users to earn rewards, keep track of crypto prices, stake their assets for additional rewards, and transfer their digital assets internationally, giving residents more control and flexibility with their finances.

In an interview shared by Bloomberg, Coinbase’s chief policy officer, Faryar Shirzad, expressed conviction that many Hawaii residents are interested in cryptocurrencies. He said:

“We know there’s a lot of interest among Hawaiians to finally avail themselves of our services, we are super excited.”

In 2017, Coinbase left Hawaii because the state required digital asset companies to hold a money-transmitter license and keep fiat reserves equal to the total value of digital currencies held for customers. This made it difficult for companies like Coinbase to operate in the island state.

However, in late June 2024, the Hawaii regulator announced that digital currency companies would no longer need a money transmitter license issued by the state to do business there. This regulatory change paved the way for Coinbase to return to Hawaii. Other crypto exchanges may likely follow suit.

Coinbase’s Regulatory Challenges

Coinbase has faced numerous regulatory hurdles over the years, often in conflict with U.S. regulators. These challenges involve disagreements over how existing regulations should apply to digital assets.

Coinbase’s efforts to address these issues include instituting lawsuits against major regulatory bodies like the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). These legal actions are aimed at questioning the regulators’ approaches to cryptocurrency.

Despite these ongoing disputes, Coinbase continues pushing for better regulatory clarity and continues promoting crypto adoption.