JP Morgan Positions to “Not Be Completely Disrupted” at the Launch of Enterprise Ethereum Bitcoin ExchangeBitcoin RegulationNews Bitcoin Exchange Coinbase Stops Services in Hawaii Due to “Untenable” Regulation Samburaj Das Advertisement: Prominent Bitcoin and Ethereum exchange and wallet Coinbase announced that it is forced to stop supporting customers in Hawaii due to an “impractical” and “untenable” regulatory policy.Citing the reason for indefinitely suspending its business in Hawaii, Coinbase revealed: The Hawaii Division of Financial Institutions (DFI) has communicated regulatory policies which we believe will render continued Coinbase operations there impractical.Coinbase was first notified of the restrictive regulatory policy by the DFI in September, one that makes it “impossible” for the exchange to operate in the state, according to a member of Coinbase’s legal team.Fundamentally, the regulation demands Coinbase or other digital currency operators to hold cash reserves equivalent to the value of the digital currency held for customers.

Coinbase adds: This policy is obviously untenable.No digital currency business – and frankly, no commercially viable business anywhere – has the capital to supplement every customer bitcoin with redundant dollar collateral.As a result, Coinbase has now made it mandatory for Hawaii-resident users to close their accounts within the next thirty days.The exchange will also halt new account signups in America’s newest state “for the indefinite future.” Customers can either send their bitcoin to an alternative wallet or swap the cryptocurrency for fiat before their accounts’ closure.The exchange adds that it hopes to open shop in Hawaii in the future by working with policymakers to change the law or by encouraging the DFI’s commissioner to “revisit” the existing policy discretion under Hawaii law.Coinbase’s exit comes at a time when Hawaii is considering a bitcoin- and blockchain-friendly bill, one that aims to establish a working group toward the exploration of digital currencies and blockchain technology in Hawaii’s public and private sectors.

“Digital currencies such as bitcoin have broad benefits for Hawaii.A large portion of Hawaii’s tourism market comes from Asia where the use of bitcoin as a virtual currency is expanding,” the bill’s text read.The digital currency exchange said it was “heartened” that members of state’s House of Representatives had introduced the bill and added that it would look forward to working with them.The recent news of Coinbase suspending its services to the residents of Hawaii took many by surprise.litecoin price euroThe cryptocurrency wallet and exchange services, one of the big names in the industry made the hard decision after the Division of Financial Institutions introduced a new regulation that classified the company has a money transmitter.ethereum price gbpAs per the new classification, Coinbase was not only required to get a license, but also match the value of bitcoins held on the platform with an equivalent fiat reserve.buy litecoin aud

The regulation in question that forced Coinbase out of Hawaii seems to be flawed on many counts.For starters, the Hawaii DFI has directly equated Bitcoin with money, which is not really the case.Without a proper understanding of the asset, the business model followed by Bitcoin companies and the difference between money and bitcoin, the regulators have imposed hurdles to the development of a crypto-economy.“While the state gives lip service to the idea that we foster high-tech companies in Hawaii, a careless or hostile regulatory environment for new technology tells entrepreneurs and investors that doing business in Hawaii comes with unnecessary hassles and risks.” A recent article on one of the news publications lists the differences between bitcoin exchanges and money transmitters.raspberry pi as bitcoin minerThe author makes an attempt to present the case in such a way that everyone including the regulators can understand the cryptocurrency, the recently introduced cryptocurrency regulation and how the latter is affecting the former.bitcoin gtx 480

The author takes an example of the Western Union, a money transmitter and compares with the business model of Coinbase.While a regulation requiring the money transmitter to maintain enough reserves makes sense for the Western Union, it may not hold good for cryptocurrency businesses.In the case of Western Union, the money in physical form doesn’t change hands directly.Whereas, bitcoin transactions are completely digital and it is transmitted to the recipient’s wallet in “almost” real-time and the very same tokens are received by the person on the other side.bitcoin $10 collegeThe movement of Bitcoin is akin to sending money over mail, which is exempted by the money transmitter license.ethereum bot traderHowever, with a thirty-day deadline looming over the Coinbase customers’ heads to withdraw funds (and bitcoins) from their account, they are unsure about managing it.litecoin credit card

The Hawaii DFI’s regulations are expected to stay in effect for at least two years, stifling not only the cryptocurrency businesses in the state but also digital currency accepting merchants.The recent regulations are expected to have far-reaching consequences, which could include tourism as well.Ref: CivilBeat | Image: ShutterstockDigital currency exchange Coinbase said today that it will stop serving customers in Hawaii following regulatory changes in the US state.bitcoin atm in italyThe startup said that it received word last September from the Hawaii Division of Financial Institutions that it would be required to hold cash reserves equal to any digital currency-denominated funds held for its customers.Citing the cost burden this requirement creates, Coinbase said that it would require its customers in Hawaii to close their accounts in the next 30 days and remove any funds they may be using the service to store.

Further, Coinbase said that it would block new customer registrations from Hawaii, a policy decision it said would be "indefinite" in light of the regulatory concerns.However, Coinbase indicated that it could reopen its doors to customers in Hawaii should conditions improve, citing a push to create a blockchain working group in the state’s legislature as a positive development.The startup went on to say: “Although it comes as little consolation to Hawaii customers, Coinbase hopes to work with policymakers to either change the law or to encourage the DFI commissioner to revisit her existing policy discretion under Hawaii law.We are heartened that members of the Hawaii State House of Representatives have recently introduced a bill that would create a digital currency and blockchain working group.” It’s not the first time that Coinbase has closed up shop in a US state following regulatory concerns.In June 2015, Coinbase cited a similar move by the Wyoming Division of Banking to require commensurate cash reserves when it stopped serving customers in the state.