Late week, Bermuda advanced legislation to regulate cryptocurrency and initial coin offerings. The country, like some others, sees opportunity in creating a regulated environment that encourages crypto companies to establish operations and invest.
Around the same time, Binance, one of the largest cryptocurrency exchanges in the world, agreed to invest in the island country.
Proud to announce @BdaGovernment’s partnership with @binance to establish a Global Compliance Centre in #Bermuda creating 40 jobs. Binance will invest $10 million in education for #Bermudians, and $5 million in #Bermuda based blockchain companies. pic.twitter.com/UxKmNdRPUM
— Premier David Burt (@BermudaPremier) April 27, 2018
Crypto exchanges, and Binance specifically, are big businesses these days. It has been estimated that Binance generates around $3.5 million in fees each day. Earnings for Q1 were pegged at around $150 million.
Loretta Joseph, Chair of the Australian Digital Chamber of Commerce Advisory Council, lauded the move by the Bermuda government;
“The Virtual Currency Business Act includes extensive consumer protection so that the BMA can protect its citizens. However, it also has enough regulation that allows the ecosystem to flourish without consequences of not knowing what will be down the road, if the law is going to change on them or the regulations are going to change. Within the ecosystem what are we talking about with ICOs? Are we talking about utilities, securities or something that’s in between both of them? I think as long as there’s clear guidance to the industry of the regulators goals, how they want to regulate and how things are defined, the ecosystem can flourish and develop. We’re seeing it unfold with these new blockchain entrepreneurs who want to flourish in the new open economy. These entrepreneurs are open to having regulation and a jurisdiction that doesn’t tolerate the nefarious players in ICOs.”
Joseph Weinberg, Chairman of Shyft, a blockchain based KYC / AML solution, said that Bermuda has a long history of being a center for financial services and the move makes sense;
“[Bermuda] has the biggest reinsurance market in the world. On top of that, being a Commonwealth country, its regulatory framework was one that Loretta and I understood, as Loretta is from Australia and I’m from Canada — both countries of which have been supportive in the development of blockchain and crypto. Bermuda also has a framework for the blockchain and crypto ecosystem to bind itself to.Bermuda’s proximity to Canada and the U.S., as well as its long histories with both countries (especially Canada) makes for a great geographic location to build great businesses that act local, but also enables markets globally.”
Loretta Joseph, who is also a Shyft advisor, said working with the Bermuda Monetary Authority has been a very collaborative process. She called it an example for the rest of the world to follow.
“The problem with regulation in the crypto space is that every country has been running toward different legislation and there’s a lot of jurisdictional arbitrage. With the Virtual Currency Business Act, we hope to create a standard. Because the BMA made a point of hearing out all the stakeholders, it is the most responsible regulation that I’ve seen being adopted by any country in the crypto space. We hope that different jurisdictions can take this as an example and will adopt similar regulations.”
As for Binance, the exchange recently set up shop in Malta. An EU island nation that has opened its doors to cryptopreneurs. Having another friendly country to set up operations is a good thing for the exchange. For Bermuda, it means more jobs and investment.
Bermuda Virtual Currency Business Act 2018
Bermuda Companies and Limited Liability Company Initial Coin Offering Amendment Act 2018 As Tabled in the House of Assembly