- Bermuda is among the first nations to bring crypto regulations in 2018.
- Minister Edwart Burt said Bermuda is still accommodating to crypto firms.
According to Bloomberg News, Bermuda is still friendly and accommodating towards crypto companies when everyone else is cautious. As told by the Bermudan Premier and Finance Minister Edward Burt, believing in the noticeable benefits available for grasp from digital assets and blockchain technology.
Bermuda and Cryptocurrency
Bermuda pioneered the implementation of digital assets’ regulatory framework as a self-governing territory with a parliamentary government. Interestingly Sonmers island is just 915 miles from the Bahamas, the field where the FTX saga was executed.
Despite being a tax haven for years, Sam Bankman Fried, former FTX CEO, chose the Bahamas as their headquarters. The collapse of the third-largest exchange was a black swan event in crypto history and shook the industry to its core. But the incident did not impact Bermuda much, mostly due to its strict crypto regulations.
The Bermudan government has been pushing its ambitious plans of being a cryptocurrency hub since 2022. Known for its appealing taxation policies and amazing natural beauty, the island has been knowingly active in crypto since 2017. As of now, approximately 17 licensed crypto firms are operating in Bermuda.
The newest development by Bermuda is the launch of their first stablecoin by Jewel Bank in December 2022, called Jewel USD (JUSD). Powered by Polygon, the stablecoin is pegged 1:1 with the US dollar and enables real-time settlements.
Bermudan and US Lawmakers Meet
In Washington, Bloomberg reported a meeting between Burt and the United States lawmakers and government officials on March 31. Discussions over common digital asset standards and their impact on the finance and insurance sectors occurred. Burt strongly believes there is a dire need for a unified approach from regulators worldwide; this would provide much-needed clarity for emergent technologies.
In 2018, Bermuda became the first to introduce the Digital Business Act, & the ICO act. Followed by some Digital assets Business rules 2018 concerning, Cybersecurity, Client Disclosure and Prudential Standards. The legislation provided a standard for the governance of ICOs and digital asset businesses.
Interestingly, the law does not require the company’s physical presence for selling tokens. A registration process in Bermuda and a corporate existence is sufficient. However, digital asset businesses must strictly comply with Anti-Money Laundering and Anti-Terror Funding laws.
Also, licensed businesses have to comply with the comprehensive AML policy. The licenses are obtained from the Bermuda Monetary Authority and include the following.
- Issuance,
- Sale and redemption of virtual coins,
- Tokens or digital assets. Suppose the business operates as a payment service using digital assets and facilitates fund transfers. It operates as an exchange, provides custodial wallet facilities, or acts as a digital assets service vendor.
The act excludes the following from digital assets business and hence needs no licensing, like
- If a company provides software for connectivity or computing power to a decentralized digital asset.
- A protocol used for the governance of transfer for digital representation of value.
- Suppose a company provides data storage or security services for digital asset business but is not engaged in any other way with the business.
These laws are still to be tested with time, but they are among the best available in the market.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/04/02/crypto-firms-are-welcome-in-bermuda-minister-during-us-visit/