It's a way for the state to recognize that frame's serials as tied to your name for ownership. Yes it is required by Hawaii state DMV and is supposed to help discourage theft (they provide permanent anti-removal license stickers), while aid in bike recovery (serials and registration plus bike info is all on record).

Unfortunately they also use this system to fine the s*** out of you too. If your bike is locked up in an inappropriate place like street signs or fences, construction scaffolding, etc they'll send you a fine in the mail unless that bike has been reported stolen (see?) in which case they impound the bike and you can recover it. If it stays locked up too long they send you a notice in the mail when it is considered abandoned and you have some time to take it back before they recycle it.


There are also hipster and trickster fines, if the bike has no brakes, you aren't wearing a helmet and isn't a cruiser (pretty much fixies and bmx) they fine you based off your registration (the fines are worse if it isn't registered). It doesn't happen that often though, you have to be making a nuisance of yourself first.