Crypto firms welcome to Bermuda: Minister during US visit
- Bermuda is among the first nations to introduce crypto regulations in 2018.
- Minister Edwart Burt said Bermuda remains welcoming to crypto firms.
According to Bloomberg News, Bermuda remains friendly and welcoming to crypto companies when everyone else is cautious. As told by Bermuda’s Premier and Minister of Finance Edward Burt, who believes in the tangible benefits available to understanding from digital assets and blockchain technology.
Bermuda and cryptocurrency
Bermuda pioneered the implementation of the digital assets regulatory framework as a self-governing territory with a parliamentary government. Interestingly, Sonmers Island is only 915 miles from the Bahamas, the field where the FTX saga was executed.
Despite being a tax haven for years, former FTX CEO Sam Bankman Fried chose the Bahamas as his 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 affect Bermuda much, mostly due to its strict crypto regulations.
The Bermudan government has been pushing its ambitious plans to be a cryptocurrency hub since 2022. Known for its appealing tax policies and stunning natural beauty, the island has been consciously active in crypto since 2017. As of now, approximately 17 licensed crypto firms operate in Bermuda.
The most recent 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 to the US dollar and enables real-time settlement.
Bermudan and US lawmakers meet
In Washington, Bloomberg reported on a March 31 meeting between Burt and US lawmakers and government officials. Discussions on common standards for digital assets and their impact on the financial and insurance sectors took place. Burt strongly believes that there is a great need for a unified approach from regulators worldwide; this would provide much needed clarity for new technologies.
In 2018, Bermuda became the first to introduce the Digital Business Act and the ICO Act. Followed by some Digital Assets Business Rules 2018 regarding online security, customer disclosure and supervisory 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 to sell tokens. A registration process in Bermuda and a business existence are sufficient. However, companies with digital assets must strictly comply with anti-money laundering and anti-terrorist financing laws.
Licensed businesses must also 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. Assume that the business operates as a payment service using digital assets and facilitates money transfers. It acts as an exchange, offers custodial wallet facilities, or acts as a digital asset service provider.
The law excludes the following from digital assets and therefore does not need licensing, such as
- If a company provides software for connectivity or computing power to a decentralized digital resource.
- A protocol used for managing the transfer of digital representation of value.
- Suppose a company provides data storage or security services for businesses with digital assets, 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 on the market.
Steve Anderson is an Australian crypto enthusiast. He has been a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralization, understanding the true potential of the blockchain.
