Hawaii proposes law to allow banks to act as crypto custodians
27 January 2020 Hawaii
Image: Shutterstock
Lawmakers in Hawaii have introduced a bill that would allow commercial banks to provide custody for cryptocurrencies.
The bill, SB2594, which was introduced on 17 January by five senators, will allow banks to hold digital assets in their custody.
The proposed legislation highlighted the provisions that banks must follow in order to provide custodial services for digital assets.
It defined custodial services as “the safekeeping and management of customer currency and digital assets through the exercise of fiduciary and trust powers under this section as a custodian and includes fund administration and the execution of customer instructions”.
Some of the provisions that banks should comply with, according to the bill, include the implementation of “all accounting, account statement, internal control, notice, and other standards specified by applicable state or federal law and rules for custodial services”.
It also listed that banks should “maintain information technology best practices
relating to digital assets held in custody” as well as fully complying “with applicable federal anti money laundering, customer identification, and beneficial ownership requirements”.
The proposed bill noted that this may include “exercising fiduciary powers similar to those permitted to national banks and ensuring compliance with federal law governing digital assets classified as commodities”.
The bill passed its first reading on 21 January and was referred to the Committee on Consumer Protection and Health and Judiciary and Commerce Committee on 23 January.
The legislation still awaits full approval.
The bill, SB2594, which was introduced on 17 January by five senators, will allow banks to hold digital assets in their custody.
The proposed legislation highlighted the provisions that banks must follow in order to provide custodial services for digital assets.
It defined custodial services as “the safekeeping and management of customer currency and digital assets through the exercise of fiduciary and trust powers under this section as a custodian and includes fund administration and the execution of customer instructions”.
Some of the provisions that banks should comply with, according to the bill, include the implementation of “all accounting, account statement, internal control, notice, and other standards specified by applicable state or federal law and rules for custodial services”.
It also listed that banks should “maintain information technology best practices
relating to digital assets held in custody” as well as fully complying “with applicable federal anti money laundering, customer identification, and beneficial ownership requirements”.
The proposed bill noted that this may include “exercising fiduciary powers similar to those permitted to national banks and ensuring compliance with federal law governing digital assets classified as commodities”.
The bill passed its first reading on 21 January and was referred to the Committee on Consumer Protection and Health and Judiciary and Commerce Committee on 23 January.
The legislation still awaits full approval.
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