Amidst the current volatility in the cryptocurrency market, Bermuda is banking on its clarity surrounding digital asset legislation to attract more crypto projects and companies.
Bermuda is one of the few countries in the world that has implemented a complete framework governing cryptocurrencies, according to a report by The Wall Street Journal published on June 3.
Bermudan officials believe that their expertise in international commerce, which accounts for around 27% of the island’s GDP, together with a skilled local workforce, translate into a basis for the creation of a strong digital-assets sector on the island.
In particular, Bermuda’s minister of economy and labor, Jason Hayward, said:
“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 industry downturn is likely to advance our goal and positively impact our long-term growth and role in this sector.”
Bermuda is competing for a share of the crypto industry
Bermuda is now competing with countries like Malta and Liechtenstein to get a foothold in the crypto sector. The strategy that Bermuda is using to entice cryptocurrency firms comes at a time when many crypto companies have said that regulatory uncertainty continues to be a barrier to the industry’s broader acceptance and future growth.
Notably, the cryptocurrency industry in the United States is currently lacking meaningful governance and safety for investors. In March, President Biden issued an executive order that authorizes several government agencies to do research on digital currencies.
The fact that Bermuda seeks to promote itself as a centre for crypto activity has not shocked observers.
According to David Schwartz, president of the Financial & International Business Association, Bermuda is establishing itself as a frontrunner in the establishment of an infrastructure for the cryptocurrency industry.
Bermuda recently passed a comprehensive framework for regulating digital assets, and it has tightened its controls regarding the laundering of illicit funds.
Issues still persist with crypto firms
A lack of familiarity inside the business with the anti-money-laundering criteria that must be met in order to get a license, as well as a reluctance on the part of banks and insurers to work with crypto companies as customers, are two of the potential obstacles that might slow down the expansion of the cryptocurrency industry in Bermuda.
In response to this, the BMA has started offering service providers with online training to assist them in better comprehending the anti-money-laundering requirements that are expected of them by the regulator.
According to Mr. Swan, an increasing number of banks and insurers are increasingly taking on crypto enterprises as clients.