Bermuda is positioning itself as a destination of choice for crypto businesses with a comprehensive regulatory framework despite broader economic turmoil and large crypto sell-offs.
Bermuda, one of the first countries globally to implement a strong legal and regulatory framework for digital assets, is confident that it can join the 14 cryptocurrency companies already registered, despite the recent collapse of TerraUSD and the drop in the price of bitcoin.
“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.” said the minister of economy and labor of the insular nations, Jason Hayward.
Lack of clarity hinders growth
Being Bermuda a long standing center for the insurance and reinsurance industry and jurisdiction with 27% of its economy coming from international companies, locals are well equipped to handle the influx of new crypto companies, competing with countries like Malta and Liechtenstein. The regulations come at a time when crypto firms view a lack of regulatory clarity as a critical barrier to industry growth. The United States is one of the countries that lacks regulatory clarity. President Biden recently issued an executive order commissioning a multi-agency investigative effort to regulate cryptocurrencies. At the same time, the UK’s Financial Conduct Authority has put in place strict anti-money laundering policies for companies to comply with before they are allowed to do business.
Laws have taken a few years to develop
Bermuda has been doing its homework since 2018, when thrown out new guidelines for initial coin offerings and digital business assets, namely the Limited Liability Companies and Companies Amendment Act 2018 and the Digital Assets Business Act. Companies use initial coin offerings to raise capital by issuing new tokens that give holders a particular utility in the company’s business activities or a stake in decision-making. Initial coin offerings are considered restricted business activities and require the approval of the Bermuda Monetary Authority. A company does not need a physical office to issue tokens, but must be registered in Bermuda. Registered companies must comply with anti-money laundering and anti-terrorist financing regulations.
The island nation has already registered 14 compliant companies, four of which are bona fide crypto firms while the others run other digital asset businesses, says currency watchdog CEO Craig Swan. blockfi, stable coin issuer Circle and Bittrex Inc have regional operations.
Association of International Business and Finance President David Schwarz said Bermuda is at the forefront of the race to regulate cryptocurrencies, while recognizing the need for active vigilance and enforcement of applicable laws.
The BMA has begun training banks and insurers to strengthen their resolve to partner with crypto businesses by educating them on the anti-money laundering policies the BMA expects from crypto businesses.
What do you think about this topic? Write us and tell us!
All information contained on our website is published in good faith and for general information purposes only. Any action that the reader takes on the information found on our website is strictly at their own risk.