The Bermuda government confirms its ambition to become a cryptocurrency hub, despite the recent volatility of the crypto market.
According to Bermuda’s minister of industry and labor, Jason Hayward, the small island state known for its stunning pink sand beaches and favorable taxation rules has been actively building its crypto sector since 2017.
On June 3, he stated that the government is unconcerned by the current market fall triggered by the Terra ecosystem’s collapse in May, noting that the market has withstood several storms since 2017.
In an interview with the Wall Street Journal (WSJ), Hayward cited the economy’s and local regulators’ experience dealing with foreign companies as a crucial component in Bermuda’s ability to become a crypto hub. He also asserted that the incident will have no impact on the company’s future plans:
“We are aware of the recent devaluation in the price of cryptocurrencies and remain confident that it does not threaten the island’s ability to become a crypto hub.”
“This slump in the business is likely to help us achieve our goal and have a favorable impact on our long-term growth and role in this industry,” he added.
Bermuda issues licenses to 14 crypto businesses
According to Crag Swan, the BMA’s chief executive, the Bermuda Monetary Authority (BMA) has issued a total of 14 licenses for crypto businesses to operate out of the British island territory, with four of those being approved in 2022.
Class T, a multi-asset-class trading firm, Bittrex Global, Circle Internet Financial Ltd., issuers of USD Coin (USDC), and BlockFi, a crypto interest account provider, are among the companies on the list, which received a license in January of this year.
Swan stressed, however, that the BMA is not aiming to accept anyone who wants to open a crypto hub in Bermuda, and that the BMA is prioritizing quality over the number in its crypto hub goals.
“Obviously, the people we want in Bermuda have to be fit and decent because we’re trying to keep the jurisdiction’s good name,” he explained.
According to Hayward, Bermuda’s licensing process is divided into three stages: a testing license, a modified license, and ultimately a fully approved operational license. The testing phase normally lasts three to twelve months, but the BMA has not stated how long it takes to become completely licensed.
The head of the Financial & International Business Association (FATF), David Schwartz, told the Wall Street Journal that the Bermuda government has been making progress in its anti-money laundering compliance activities since 2020, but that there was still more to be done.
The FATF, based in Paris, sets global anti-money laundering regulations, and Schwartz believes that the success of Bermuda’s crypto sector will be determined by how closely the government monitors and supervises the businesses it licenses:
“They’ve got great rules and regulations and laws, but it’s all about the implementation at the end of the day.”
