Hawaiian lawmakers have introduced a bipartisan bill that would allow banks to hold cryptocurrencies.
Introduced on January 17th and sponsored by five state senators, the bill defines all digital assets as “intangible personal property” and categorizes cryptocurrencies by three different categories: assets, securities and digital currencies. Under the proposal, banks could hold all three, maintaining cash reserves for all digital assets in their possession.
Digital assets are not deemed “depository liabilities or assets of the bank.” While they remain the property of the customer, banks may facilitate transactions at a customer’s request. A bank’s liability in the event of a loss, however, is limited if the bank was authorized by the customer to make the transaction.
The bill also authorizes courts to hear claims relating to digital assets.
Banks have long avoided Bitcoin (BTC) and crypto, characterizing the asset class as untouchable and largely associated with dark web transactions and criminal activity. But under a clear legal framework where banks would be able to offer new crypto services for their customers and hold digital assets in everyday bank accounts alongside traditional money, Bitcoin and its numerous cousins could entire a new phase of legitimacy and adoption.
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