Amid the current volatility in the cryptocurrency marketBermuda relies on its clarity around digital asset legislation to attract more crypto projects and companies.
Bermuda is one of the few countries in the world to have implemented a comprehensive framework governing cryptocurrencies, according to a report by The Wall Street Journal published on June 3.
Bermuda officials believe their experience in international trade, which accounts for about 27% of the island’s GDP, coupled with a skilled local workforce, translates into a foundation for the creation of a strong digital asset sector in the Bermuda. island.
In particular, Bermuda Minister of Finance and Labor Jason Hayward said:
“We are aware of the recent devaluation in the price of cryptocurrencies and are confident that it does not threaten the island’s ability to become a crypto hub.”
“This industry downturn is likely to advance our goal and have a positive impact on our long-term growth and role in this sector.”
Bermuda Competes for a Piece of the Crypto Industry
Bermuda is now competing with countries like Malta and Liechtenstein to gain a foothold in the cryptocurrency sector. The strategy that Bermuda is using to attract crypto firms comes at a time when many cryptocurrency firms have said that regulatory uncertainty remains a barrier to the broader acceptance and future growth of the industry.
In particular, the cryptocurrency industry in the United States currently lacks meaningful governance and security for investors. In March, President Biden issued an executive order which authorizes various government agencies to conduct research on digital currencies.
The fact that Bermuda is seeking to promote itself as a hub of crypto activity has not surprised observers.
According to David Schwartz, president of the International Business and Finance Association, Bermuda is establishing itself as a pioneer in establishing an infrastructure for the cryptocurrency industry.
Bermuda recently passed a comprehensive framework to regulate digital assets and has strengthened its controls regarding the laundering of illicit funds.
Problems still persist with crypto companies
Lack of familiarity within the company with the anti-money laundering criteria that must be met to obtain a license, as well as reluctance on the part of banks and insurers to work with crypto companies as clients, are two of the potential obstacles that could slow down the expansion of the cryptocurrency industry in Bermuda.
In response to this, the BMA has started to offer service providers online training to help them better understand the anti-money laundering requirements that the regulator expects of them.
According to Mr. Swan, an increasing number of banks and insurers are accepting more and more crypto companies as clients.