Warning: Most virtual currencies are based upon computer cryptography and derive their value solely from the market’s perception of their value, which can experience great swings. You should be aware that there is a potential for you as a consumer to lose all of your virtual currency.

This disclosure is something a state agency wants local consumers to get from brokers of virtual currencies such as Bitcoin before making transactions.

The warning is in Senate Bill 3082, which was heard Tuesday by the House Consumer Protection Committee.

Hawaii’s Division of Financial Institutions at the Department of Commerce and Consumer Protection endorses much of the measure, which has a mix of virtual currency industry support and opposition. SB 3082 also contains proposed regulations opposed by DFI and industry businesses.

Regulating virtual currency trading in Hawaii is an issue of high importance this year because DFI in 2016 interpreted state law governing money transfer businesses as applying to virtual currency brokers, and that led at least one major firm, Coinbase, to quit doing business in the state last year.

Also, consumer awareness of virtual currencies is growing, especially with highly publicized gyrations in Bitcoin values that spiked from under $1,000 early last year to just over $19,000 in December and then fell to around $8,000 earlier this month.

Other virtual currencies exist, including Zcash, Dash, Ethereum, Tether, Stellar, Monero, Litecoin, Ripple and Dogecoin.

Meanwhile, more businesses are moving to accept virtual currencies as payment for goods and services. The Kauai Shores Hotel announced last month that it would take Bitcoin for online room bookings.

Currently, companies that broker purchases or sales of virtual currencies for Hawaii consumers must be licensed as a money transmitter under state law and hold in reserve cash or other allowed liquid assets equal to the value of the virtual currency held for Hawaii customers.

San Francisco-based Coinbase said this reserve makes doing business in Hawaii unfeasible.

“The policy forces virtual currency custodians like Coinbase to hoard huge sums of cash,” the company said in written testimony. “As a result, Hawaii has shut down all lawful virtual currency operators, even while unlawful, offshore service providers persist.”

To address the issue, DFI advocates eliminating the reserve requirement while maintaining licensing. Other provisions in the bill include third-party security audits if a company stores virtual currency for customers and giving customers a warning that also notes a computer failure or software attack could wipe out a customer’s virtual currency holdings.

DFI opposed a part of the bill that would adopt about 60 pages of regulations proposed by the Uniform Law Commission. DFI said no state has adopted this model. This part of the bill was added by the House Committee on Intrastate Commerce last week. The Intrastate Commerce Committee, chaired by Rep. Takashi Ohno, added similar language to a companion bill, House Bill 2257, which has yet to be heard by Senate committees.

J.P. Schmidt, a former Hawaii insurance commissioner now advising virtual currency platform Ethereum Foundation, favors no virtual currency regulation in Hawaii but said DFI’s plan is worth supporting because Hawaii is the only state where consumers can’t trade virtual currency.

“This sends a very bad message about Hawaii and our dealing with new technology,” he said at Tuesday’s hearing. “We need to at least take that first step allowing citizens to exchange and trade virtual currency.”

Also endorsing DFI’s position were Coinbase along with Hawaii companies Blockweather Holdings, Blockchain Investments and Blockchain Solutions Hawaii.

Opponents of the bill include Hawaii-based Anatha Technologies. Industry supporter Ty Robinson said government can’t effectively regulate virtual currencies. “Requiring a license to transmit and/or receive virtual currency is, in this global climate of high tech growth, not only out of place but out of time,” he said in written testimony.

The committee deferred a decision on the bill until today.