Ever since cryptocurrency exchange Coinbase terminated its operations in Hawaii in 2018, there have been many questions about where crypto trading in the state is heading. Some have even wondered whether Hawaii bitcoin law has even made cryptocurrency trading illegal. If you’ve been wondering how to buy cryptocurrency in Hawaii, read on.
Is Bitcoin now illegal in Hawaii?
Certainly not. Bitcoin Mining, owning, trading and doing business with bitcoin and other cryptocurrencies are still legal in Hawaii. The state gets a lot of revenue from tourists visiting from Asia, among who cryptocurrency use is fairly widespread, so it makes sense for Hawaii to not ban crypto use. There are even several bitcoin ATMs installed. So, no. It’s not illegal by any means.
So what happened with Coinbase?
Coinbase applied for a license to operate in Hawaii as early as 2014 and began operations in the state soon after. However, Hawaii cryptocurrency laws have changed since then. In late 2017 the Hawaii Division of Financial Institutions announced that new regulations were to be put in place. According to these regulations, any digital currency operator (including crypto exchanges) are required to hold enough reserves to cover all assets held by Hawaii residents. These reserves would have to be in liquid assets. Since Hawaii doesn’t consider cryptocurrencies as liquid assets, the operator’s reserves would have to be in cash.
As of now, this would mean that for every bitcoin held by a Hawaii resident, Coinbase would have to keep a reserve of 9500 dollars. If 150.000 residents (only 0.1% of the state’s population) hold 1 BTC each, that would mean Coinbase would be forced to keep a reserve of just over 1.4 billion dollars.
Coinbase stated that these regulations are way too harsh and are not practical for any type of currency operator anywhere in the world and they would not be able to comply, so they ceased operations in the state.
Hawaii cryptocurrency laws haven’t made crypto trading in the state illegal. They have just created very impractical conditions for exchanges.
If, after reading the information above, you’re thinking the answer to how to buy cryptocurrency in Hawaii is a solid “you can’t”, then you’re wrong. It’s actually pretty simple. But you won’t be able to use Coinbase. Instead, we’ll use a Coinbase alternative.
Which Coinbase alternatives are there for Hawaii?
There are several crypto exchanges, both US-based and international, that Hawaii residents can use to buy cryptocurrency. Kraken, Bitstamp, Gemini, and Coinmama are all available. Peer-to-peer crypto trading sites such as Localbitcoins.com are also an option. Finally, some e-wallet providers, like Skrill and Uphold offer the option to buy several crypto tokens.
How to buy Cryptocurrency in Hawaii
Let’s assume you want to purchase some Ripple (XRP) tokens. I’ll give you a step-by-step guide on how to buy Ripple in Hawaii using Uphold.
1. Creating and funding your Uphold account:
Uphold is actually an e-wallet solution. In this regard, it is similar to PayPal. But unlike its better-known competitor, Uphold also supports cryptocurrency operations. It may not be the option with the lowest transaction fees, but its interface –albeit unusual for a crypto exchange– is very user-friendly and offers fast reliable transactions.
If you don’t have an Uphold account, you can create a free one clicking here. After creating the account you need to verify it to get the most out of your Uphold. Verification is easy and you only need to provide a photo of a government-issued ID and a selfie.
When you log in to your account you will see several “cards” on your dashboard. These cards are like the different wallet addresses you have on other exchanges, so you have a “Dollar card”, a “Bitcoin card”, a “Ripple card” and so on.
- Our first step will be to fund your USD card. Click on “Add funds”
- There are four options for adding funds to your USD card: from a US bank account, from a Euro bank account via SEPA, from a credit/debit card or with crypto. Click on “from U.S. Bank Account”.
- Fill in the required information, accept the terms and conditions and click “Create”. Note that the “Name this account” field is so you can select a name that is easy for you to identify, in case you link multiple bank accounts to your uphold account. The name on the bank account itself must match the name on your uphold account. Once the account is linked, you can select it as an option when adding funds to your USD card. Transfers take about 5 business days to complete.
2. Buying cryptocurrency with USD on Uphold
- Once the funds are in your card it’s time to purchase your Ripple tokens. Let’s suppose you want to purchase 20 dollars worth of XRP. First, you must also create the cards for the tokens you want to buy. To create your Ripple card click on “Add card/currency” from your dashboard. Give your card a name, select “XRP” from the drop-down list and then click “Create”.
- Now head back to your dashboard, click on your USD card, like before, and you will be taken to the same screen where you linked your account from. But now, instead of clicking “Add funds”, click on “Send to Uphold Card”. The following screen will appear:
- Select your Ripple card from the drop-down list. Then type in the amount you wish to purchase (in USD). You will be presented with the current rate, fee and final credited amount. If everything is satisfactory, click “Confirm” and the transaction will complete in seconds. Congrats! You have now bought your Ripple.
Going through crypto exchanges like Kraken or finding a peer on Localbitcoins.com are also pretty straightforward procedures.
Even if cryptocurrency laws have created conditions that some may find impractical or too restrictive, crypto trading is still totally legal in Hawaii. You may not be able to use Coinbase after they pulled out of the state, but there are several fine options available to you. E-wallet providers like Uphold are a good place to start.
Let us know if you have any questions about buying crypto in Hawaii!