Despite the surge in popularity of cryptocurrency, regulators are still struggling to understand the emerging asset class. This has resulted in many people having limited options when it comes to the purchasing of cryptocurrency (more specifically, residents of Hawaii). Many of our readers have been asking us about how to buy cryptocurrency in Hawaii, so we thought we'd create this all-encompassing step-by-step guide to help guide you through the crypto world!
How to Buy Cryptocurrency in Hawaii (Quick Guide):
Step 1: Register for BlockFi
Step 2: Fund your account
Step 3: Buy your desired cryptocurrency
Why is it so Hard to Buy Cryptocurrency in Hawaii?
Before we get into discussing how to buy cryptocurrency in Hawaii, we first need to understand why this is a topic of discussion in the first place. It all traces back to February 2017, and one particular organization called the Hawaii Division of Financial Institutions or the DFI. They're more or less the state-based version of the SEC, which is responsible for regulating and licensing all financial activities and companies that operate within Hawaii.
Back then, they enforced a new law that dictated that cryptocurrency companies and services such as exchanges, need to hold a cash-on-hand equal to the value of cryptos that their customers hold. For example, let's take the current market rate of $35,000 for one Bitcoin. If a native Hawaiian holds one Bitcoin in a local (Hawaii-based crypto service), then that exchange or wallet needs to have $35,000 in their reserves in case anything goes wrong. You can see why there's a problem here.
Let's say that 10% of Hawaii's current 2021 population holds just one Bitcoin – roughly 150,000 people holding 150,000 BTC in total. Then cryptocurrency companies that offer some storage services like an exchange account or a wallet need to have a combined $5.25-billion (150,000 BTC x $35,000) in their reserves. Even for large platforms or companies, that amount is far too expensive and costly for them to justify operating in Hawaii. Even large players like Coinbase pulled out.
Where You Can Buy Cryptocurrency in Hawaii
However, Hawaii appears to have become far more welcoming towards cryptocurrencies in later years. In March 2020, the state announced a new “digital currency regulatory sandbox” initiative, which has allowed 12 cryptocurrency companies to offer services without having to abide by the aforementioned 2017 rules. These companies are:
- Apex Crypto
- Cloud Nalu
- River Financial
- Robinhood Crypto (no longer a part of the program as of writing)
That said, a recent update seems to have excluded Robinhood. But still, that's 11 in total to choose from when you're ready to come back into the crypto market in Hawaii. Although it is a shame that those enthusiasts and investors in Hawaii missed out on the cheap prices and market exposure over the last few years, this is proof that things are getting better with crypto. Although cryptocurrencies were never banned there in the first place, this new “sandbox” should make things easier.
How To Buy Cryptocurrency In Hawaii? (Step-by-Step Guide)
It looks like Coinbase, and some of the major exchanges that we come to recognize like Binance or Kraken are still not offering their services in Hawaii. Nevertheless, there's that 11 that we can take a pick from if you're wondering how to buy cryptocurrency in Hawaii, which is quite a healthy selection. You can, naturally, choose which ones you'd prefer. But for our little demonstration of how to buy cryptocurrency in Hawaii, we'll be using BlockFi.
The reason for this is simple – add-on services. BlockFi is in itself a fully-fledged financial platform that offers more than simple cryptocurrency buying (which is why we're here for), selling, and trading. There are interest-bearing accounts where you can earn upwards of 8% APY annually, more so than any regular fiat-based account in a regular bank would earn you, as well as being able to take up crypto-backed loans in a pinch, with rates as low as just 4.5% APR.
That's not to mention a VISA credit card, where you can spend your cryptocurrency held in a BlockFi account freely with the tens and millions of global merchants that support VISA, whether that's for buying groceries or going shopping. On top of that, you get cashback of 1.5% in Bitcoin for every purchase and a load of other perks and bonuses. Among these few extra services is where BlockFi's value really lies, as a true replacement of any traditional bank.
1. Register And Set Up An Account
The first step to getting started on BlockFi, and thus knowing how to buy cryptocurrency in Hawaii, is naturally trying to register and set up an account there. As with any online service, this process is very straightforward by following the on-screen prompts, from filling up your name, email address, phone number, a (strong) password, and an optional referral code. There'll be the usual verification process, where you'll need to click on a provided link sent to your email address and phone number.
Once that's done, there are a few more things than you need to do compared to a regular exchange. Being a regulated cryptocurrency services provider, BlockFi has to comply with additional rules around AML (anti-money laundering) and KYC (know your customer) compliance measures, which ordinary banks have to go through as well. This means you'll have to provide extra information like your address, social security number (SSN), and denote the source of your funds.
There are also some additional account setup processes that are optional, but we do recommend that you turn them on. The first is 2FA or 2-factor authentication. This will make sure that only you, through one-time codes created and sent to an authentication app on your phone, can authorize certain actions on your BlockFi account, such as withdrawing funds. While simple, it adds a very robust layer of security on top of your password and makes your account harder to compromise.
2. Funding Your BlockFi Account
The next step to learning how to buy cryptocurrency in Hawaii using BlockFi, we'll need to start funding your account in order to purchase said cryptos. Thankfully, the process of putting funds into your BlockFi account is plenty easy. There are three options for you to choose from – ACH transfer, wire transfer, or depositing cryptos from another account or wallet. The former two, of course, are best for those users who don't have spare cryptos and need some fiat currencies to start with.
The setting up process for ACH and wire transfers respectively are again, quite simple to go through. Just follow the on-screen instructions, starting from going to your “Profile Settings”, then selecting “Bank Accounts”, and later adding and linking your BlockFi account with a bank account of choice. When that's done, just click on the “Deposit” tab, and then select which currency you'd want to deposit with. In this case, let's pick “USD (as Stablecoin)” to fund your BlockFi account.
When it comes to choosing between ACH and wire transfer, the differences are quite simple. ACH is a bit slower to process and finalize the transfer, taking 3-5 days for funds to reach your account, with an arguably low daily deposit limit of just $1,000 but is cheaper in terms of fees. Wire transfers are more expensive when it comes to transfer fees, but are otherwise a lot faster, with funds taking just 1-2 days to reach your BlockFi account, and no maximum daily deposit limits.
3. Choosing Cryptocurrencies
The alternative to using fiat currencies like the dollar, you can of course continue our guide on how to buy cryptocurrency in Hawaii using cryptocurrencies. If you're familiar with cryptocurrency exchanges or wallets and how they work, this process will be second nature in helping you to fund your BlockFi account. Just click on that “Deposit” tab once again, and take your pick in which crypto token you'd like to deposit with. In this demo, let's say we choose “Bitcoin (BTC)”.
Once you've selected this, you're then shown a QR code and a BTC deposit address. Either scan that QR code, or manually copy+paste the Bitcoin address to deposit BTC into your BlockFi account. The only important thing to bear in mind here is info, and make sure you type in the correct address, word for word. Some tokens may require additional data for the deposit. Also, depending on which service you're withdrawing from, it might take some time for the withdrawal to be reviewed.
4. Buy Cryptocurrency On BlockFi
Once you already have some funds on your BlockFi account, the process of knowing how to buy cryptocurrency in Hawaii through BlockFi is very easy. Simply click on the “Trade” tab on your BlockFi dashboard, and then pick from which token you'd want to buy. Let's say you'd like to trade from your USD to BTC (Bitcoin). Once you're on the trading interface, click on “Receive”, and then “USD”. After that, click on “Pay With”, and then “BTC”.
This sets up the trading pair – you'd like to receive USD into the pair, and then exchange that into BTC. Once this is done, type in and enter the amount of USD you'd like to spend, and then click on the swap icon. This will automatically calculate the equivalent amount of BTC you will get based on that USD amount by concurrent market prices. Next, click on “Confirm Trade” to proceed, and have an overview of the trade details like the amount and pricing.
You can finalize this by clicking on “Submit Trade”, and voila, you now have cryptocurrencies in your BlockFi account, while you're sipping on some coconut water on a lovely Hawaiian beach by the sunset. Whether it's Bitcoin, Ether, or any other token, it's no longer a pain in the backside anymore if you'd like to learn how to buy cryptocurrency in Hawaii. Here's hoping it'll only get easier now once regulations around crypto tokens in Hawaii (and elsewhere in the US) mature a bit.