Crypto Turmoil Doesn’t Affect Bermuda’s Plans To Emerge As Crypto Hub

Key Insights:

• Bermuda’s minister doesn’t see crypto market volatility as a hindrance to becoming a crypto hub.
• Jason Hayward said Bermuda wants to attract more cryptocurrency-related projects and firms.
• Bermuda Monetary Authority has licensed 14 digital-asset companies, including four in 2022.

During the Digital Currency Group Founders’ Summit in 2019, Edward David Burt, the youngest Premier of Bermuda, shared how determined he is to make the country the biggest crypto hub.

Since then, the British island territory has been taking steps to make Bermuda the most crypto-friendly jurisdiction. For instance, the country enacted a regulatory regime governing initial coin offerings (ICO) and awarded its first ICO certification to the fintech company Uulala (UULA).

Now, the country is optimistic that the recent Terra network crash, causing a deep plunge in the price of its stablecoins TerraUSD (UST) and Luna, would have a positive impact in the long run.

Bermuda proposes crypto-friendly laws to attract more businesses

In a move to become a prominent player in the crypto industry, Bermuda has had high hopes that the recent crypto price crash won’t affect their crypto-hub ambitions.

Jason Hayward – Bermuda’s Minister of Economy and Labor – believes that the country’s transparent crypto regulations and comprehensive regulatory framework could attract more crypto companies.

Speaking with the Wall Street Journal, Hayward noted that the recent devaluation in the price of cryptocurrencies such as bitcoin (BTC), which has fallen over 50% from its November record high, “does not threaten the island’s ability to become a crypto hub.” He further said,

“This industry downturn is likely to advance our goal and positively impact our long-term growth and role in this sector.”

According to Bermudan regulators, 27% of Bermuda’s economy accounts for international businesses, including their local trained workforce. Competing with other crypto-friendly countries like Malta and Liechtenstein, Bermuda is enticing crypto companies to get a foothold in the sector.

The move comes at a time when crypto firms blamed regulatory uncertainty as a barrier to the sector’s broader acceptance.

Additionally, crypto experts believe that Bermuda is one such jurisdiction that has enacted a proper regulatory framework for cryptocurrencies. 

David Schwartz, president of the Financial & International Business Association, said Bermuda is leading the way in crypto regulation in establishing an infrastructure for the crypto industry.

Schwartz added that it is unknown how the regulators intend to supervise and examine the crypto firms. He said,

“They’ve got great rules and regulations and laws, but it’s all about the implementation at the end of the day.”

Per the 2018 legislation, all cryptocurrency companies in Bermuda should get a license from the Bermuda Monetary Authority (BMA), which oversees the island’s insurance and reinsurance industry.

So far, the BMA has approved licenses to 14 digital-asset companies, including four crypto companies, in 2022. This includes stablecoin USD Coin (USDC) provider Circle, crypto-lending startup BlockFi, and crypto exchange Bittrex.