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Bermuda remains open to hosting digital currency firms amid recent industry collapses

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Bermuda’s government says it remains unfazed by the recent streak of industry collapses in the digital currency sector and is keen to play host to virtual asset service providers (VASPs).

Bermuda’s Premier and Finance Minister Edward Burt disclosed this in a meeting with U.S. officials in Washington on March 31, stating that his visit to Washington was to reiterate his country’s commitment to ensuring a solid framework to guarantee investor protection.

The Finance Minister added that a global effort remains key in regulating the digital currency industry and pushed for “common standards” to provide clarity for all stakeholders. During his stint at the U.S. capital, Burt was hosted by the Global Blockchain Business Council (GBBC), where he confirmed that the region is still open to digital currency firms despite the grim incidents that rocked the ecosystem.

FTX’s implosion in November 2022 cast doubts over Bermuda’s ambitions to become a digital asset paradise, given its proximity to the Bahamas, the headquarter of the beleaguered FTX. Burt clarified that firms are welcome to set up shop in Bermuda if they meet thorough requirements of the country’s regulatory bodies.

“I think that our approach has been vindicated,” said Burt amid claims that FTX snubbed Bermuda for the Bahamas’ lax regulations.

As proof that Bermuda is marching forward with its digital currency plans, Burt pointed to the recent launch of the first stablecoin released in the territory dubbed Jewel USD (JUSD). The stablecoin, pegged to the U.S. dollar and powered by Polygon (NASDAQ: MATIC-USD), is widely touted to allow institutions to handle real-time settlements using a “Bermuda-based, non-U.S. solution.”

Despite plummeting prices, implosions, and dwindling transaction volumes, Bermuda’s government has not budged from its digital currency ambitions.

“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,” said Jason Hayward, Bermuda’s Minister for Economy and Labor.

Still attracting international players

Although Bermuda has one of the most stringent registration requirements in the Caribbean, the territory still attracts international digital asset service providers. The Bermuda Monetary Authority (BMA) has issued over 14 firms with operational licenses, a third of which received their approvals in 2022.

Hayward noted that the reason for the meticulous scrutiny is to prevent the proliferation of bad actors in the region and protect investors’ interests. Typically, the region’s licensing procedure is divided into three, beginning with a testing license and ending with a full operating license.

“So obviously, the persons that we want in Bermuda must be fit and proper because, essentially, we’re looking at maintaining the jurisdiction’s quality name,” said Hayward.

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