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The ability to buy and sell bitcoin and other cryptocurrencies in Hawaii is a bit of a complicated subject.

While there are exchanges where crypto assets can be bought and sold in Hawaii, the reality is the current regulatory framework in the state has heavily restricted this sort of activity. Perhaps most notably, even Coinbase, which has always worked rather closely with regulators to make sure they’re following the letter of the law, decided to leave Hawaii in response to a regulation that requires exchanges in the state to hold the US dollar-equivalent value of all the crypto held by their users on their respective platforms.

Other popular bitcoin and crypto platforms that cannot be used in Hawaii include mega exchange Binance, and BTC-payments operator Strike Global. While some options for buying and selling bitcoin in Hawaii do remain, the growth of crypto in this state has definitely been stunted in the past few years. That said, the state legislature will need to act soon if the current, temporary regulatory framework is going to either continue or change to further embrace the crypto industry, as a previously-established pilot program for the industry is set to expire soon.

For now, the crypto users in Hawaii are still able to operate in the open.

Our Favorite Cryptocurrency Exchange in Hawaii

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Funding Methods Banks Account (ACH), Debit card, Paypal, Wire Transfer
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History of Bitcoin in Hawaii

Hawaii’s history in the bitcoin market goes all the way back to 2014; however, the early statements from the state’s government leaders were far from positive.

On February 26, 2014, various actors in the state government, including the governor, issued a warning regarding bitcoin to the people of Hawaii. The warning was effectively a response to the recent collapse of the Mt. Gox bitcoin exchange.

Notably, the message from the state government indicated that no cryptocurrency companies had been licensed as money transmitters in the sate, which means any exchange operating in Hawaii would be breaking the law.

Hawaii Launches Digital Currency Lab Pilot Project

The regulatory environment in Hawaii continued to be a dead end for potential crypto-related business in the state until 2020, which is when the state started to open up to the bitcoin industry.

In 2020, the Digital Currency Innovation Lab was created in Hawaii, which allowed 11 crypto companies to operate in the state without the requirement of obtaining a money transmitter license. A year after the program was initiated, four more companies were added to the program.

Some of the well-known companies that are part of this program include Gemini, Uphold, SoFi, and BlockFi. The program is currently set to expire in June of 2022. If the state legislature does not pass further legislation regarding this program and the cryptocurrency industry more generally, then it will be illegal for exchanges to operate in the State of Hawaii once again.

That said, it seems likely some sort of resolution will be found for crypto exchanges, as there are currently five different bills related to cryptocurrency going through debates in the state capital.

Is It Legal to Buy Cryptocurrency in Hawaii?

Yes, it is currently legal to purchase bitcoin and other crypto assets in the State of Hawaii. That said, there are a number of crypto exchanges that would like to operate in Hawaii that are currently unable to do so due to the regulatory restrictions found in the state at this time.

For example, Coinbase and Binance, which are perhaps the two most well-known crypto exchanges in the world, cannot be used by residents of Hawaii. In addition to a few online exchanges that are part of the regulatory sandbox that is active in Hawaii at this time, there are also seven bitcoin ATMs that can be found in the state, mostly in Honolulu.

What is the Cheapest Way to Buy Bitcoin in Hawaii?

The cheapest way to buy bitcoin, ether, litecoin, and other crypto assets in Hawaii is through the online crypto exchange Gemini (which is based in the USA). While there are cheaper exchanges available in other states, the number of exchanges that can operate in Hawaii is limited due to the local government’s hesitant approach to the crypto industry as a whole.

The current regulatory sandbox in Hawaii is expected to expire in the summer of 2022, so it would make sense to reassess the crypto exchange market in Hawaii at that time if you are a serious trader.

With all that said, it’s important to remember that exchange fees also depend on the amount of volume you are doing on a monthly basis, so it would make sense to check out BlockFi and Bitflyer as well.

Can I Buy Bitcoin Anonymously in Hawaii?

Purchasing bitcoin anonymously is difficult in any jurisdiction due to the ways in which both the Bitcoin blockchain and the legacy financial system function.

While there are bitcoin ATMs that operate in Hawaii, these systems are not as anonymous as they were in the early days of the crypto industry. Additionally, you’ll be looking at paying fees higher than 15% in most situations when using these sorts of kiosks.

The exchanges that are allowed to operate in the State of Hawaii will also not be a good option if you’re interested in protecting your privacy, as users of these exchanges must hand over a large amount of personally-identifying information when they sign up for their accounts.

If you want to purchase bitcoin anonymously in Hawaii, you will need to look at peer-to-peer options such as trading cash for bitcoin with a friend or using a decentralized exchange like Bisq. Of course, it’s important to remember that you are usually also leaking your identity to the person you are trading with in these situations.

What is the Best Way to Get Cryptocurrency in Hawaii?

There is no single best way to buy bitcoin in Hawaii because different platforms are built for different types of users.

If you are someone who simply wants to buy bitcoin with the lowest fees possible, then Gemini is usually going to be your best bet.

Anyone who wants access to a wider variety of crypto financial services, such as borrowing and lending, from their crypto exchange may want to look into BlockFi. Notably, both of these crypto financial institutions are also working on bitcoin credit cards, which make it easier to bridge the gap between the crypto and traditional financial worlds.

Kraken Exchange is also a good option if you’re looking to do a high-volume number of trades.

The regulatory environment regarding cryptocurrency in Hawaii should also be watched closely, as there are expected to be some large changes coming up in 2022.

Once the state legislature has made changes to the current laws that are likely to make Hawaii a more appealing option for some of the largest exchanges in the world, crypto users will benefit from having many more options at their disposal when it comes to picking the perfect cryptocurrency exchange platform for their needs.

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