Introducing the Currency Standard initiative

Bermuda is pleased to announce an initiative that will establish Bermuda as a lighthouse to other jurisdictions on how to adopt and benefit from the advancement of technology around digital currencies.  We are leveraging our position as a jurisdiction with a history of expertise in regulating financial services, and our bespoke regulatory framework around digital assets, to provide an environment to drive and showcase financial innovation.

Regulators and legislators around the world have been called to action by the development of cryptocurrencies and the announcement of Facebook’s Libra Association.  There has been considerable global debate as to the right path forward and whether new currencies like Bitcoin, Libra as a basket of fiat currencies or Central Bank Digital Currencies are the answer.  There is considerable confusion globally as the risks are weighed of central banks launching their own digital currencies vs the rise of non-sovereign currencies. 

Regulators and central banks around the world have been weighing in with their views.  Bank of England Governor Mark Carney has suggested Central Banks should create their own Libra like basket currency.  The German Central Bank suggested in their July report that “many use cases could be covered through the use of tokenized commercial bank money” and that there is “no need to introduce” central bank money at this juncture.  China is rumored to be close to launching their own digital currency.  Two US Congressmen have asked Federal Reserve Chairman Jerome Powell if they are investigating the creation of a US dollar central bank currency.  Recently the International Monetary Fund suggested that synthetic Central Bank Digital Currencies that are issued by the private sector and backed by Central Banks are the answer.

There are many views and a lot of talk but little action.  For Bermuda, the risks of launching our own digital currency outweigh the opportunities.  However, we recognize that there are experts who have been developing this technology to simply create digital versions of existing money that can be used to improve our financial system today.  This technology represents an opportunity to develop open programmable APIs on top of money that will change the shape of our global financial ecosystem.  We also recognize that there is a wide ecosystem of players keen to build the future of financial services on top of these digital dollars. 

The core challenge is that the industry ultimately needs clarity.  They need an environment which enables them to innovate comfortably under the supervision of a competent and respected regulator.  They need an environment that allows them to showcase what is possible with this technology and that the risks associated with cybersecurity, custody and can be managed.  They need a place where they can drive comfort and understanding among global regulators and legislators that this technology is not something to be feared.

Bermuda aims to provide that clarity with our Currency Standard initiative.  We are pleased to announce that we aim to drive the adoption of regulated 1:1 US dollar backed stablecoins issued by private entities to provide an environment to develop the future ecosystem of open finance.  We will turn Bermuda into a global innovation sandbox to advance the digitization and unbundling of traditional finance to drive increased access to financial services and act as a showcase model for other jurisdictions to copy.

We will kickstart this initiative with the government committing to accept, for payment of government taxes, fees and services, 1:1 US dollar backed stablecoins that get licensed by our Bermuda Monetary Authority.  We will then explore paying out these stablecoins to civil servants and contractors who opt in to accept them as well as payments for social programs.  We intend to work closely with local industry to encourage and support adoption as well as with the international Fintech community to provide an environment for innovation.  We will invite foreign regulators and legislators to come to Bermuda to witness what is possible and gain an understanding of how they can apply this technology and work with the private sector to increase financial inclusion and access in their own jurisdictions.

We are pleased to have lined up a wide range of partners to join us in this announcement who have expressed an interest in getting licensed under our Digital Asset Business regulatory regime and working closely with us to advance this initiative.  Our combined hope is to showcase to the world that there is a clear path to providing regulatory clarity around this industry by focusing on the risks and to use Bermuda’s small contained ecosystem as a place where foreign regulators and legislators can come to touch, see, feel, use and ultimately understand the benefits of this revolutionary technology.

On the 1:1 US dollar stablecoin issuer front we are pleased to announce the support of Circle and Coinbase with their US Dollar Coin and CENTRE consortium, Binance with BUSD, TrustToken with TUSD, Stably with USDS and HubCulture’s Ultra uUSD for this initiative.  We are pleased that Jeremy Allaire from Circle, the first company to have achieved a full license under our Digital Asset Business regulatory regime, came to the island personally give his support as well as Gin Chao, the Chief Strategy Officer of Binance.  We welcome and are grateful of the participation of others who expressed interest in getting licensed and will happily adopt their digital currencies into our ecosystem as they get licensed by our Bermuda Monetary Authority.

On the open financial ecosystem front we are pleased to announce the support of deposit, lending and payments company Celsius Network who pays interest on deposits, the first digital asset lending company and institutional custodian SALT, heathcare payments provider MAPay, payroll solutions provider Sablier and stablecoin exchange provider Stablehouse.  We are pleased that Liz Rabban representing Celsius, Rob Odell representing Salt Lending, Philippe Bekhazi from Stable House and Michael Dershem representing MAPay were all on island for the announcement. We welcome their interest in getting licensed and work with us to develop the ecosystem of services that can be built on top of stablecoins.

Finally, we are appreciative of commitments from ConsenSys, a leading blockchain technology company, to help make our vision a reality.  We are pleased that ConsenSys sent two representatives to participate in the announcement. Thomas Rush from the firm’s investment arm, ConsenSys Labs, which is helping us unlock opportunities for entrepreneurs to come to Bermuda and use our island as a sandbox of innovation.  As well as Patrick Beraducci, ConsenSys’ Global Fintech Co-Head, whose Codefi Payments product provides tools that make it easy for governments and merchants to accept digital payments. 

We welcome any and all companies serious about developing the future of open finance to come to Bermuda and work with us to turn Bermuda into a global innovation sandbox and to showcase to the world the potential of this exciting new technology.

Please write to us at fintech@gov.bm if you’d like to participate as we develop this initiative and showcase what is possible with the future of open finance.

Bermuda Licensed Entities

Circle (circle.com)

Circle is a financial services platform that individuals, institutions and entrepreneurs use to trade, invest and raise capital with open crypto technologies. Circle is also the co-founder of CENTRE, an open source technology project and membership consortium with a mission to drive the global, mainstream adoption of fiat stablecoins.

Entities that have expressed interest in participating

Coinbase (coinbase.com)

Founded in June of 2012, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like bitcoin, ethereum, and litecoin. We’re based in San Francisco, California.

Binance (binance.com)

Beyond operating the world’s leading cryptocurrency exchange, Binance spans an entire ecosystem.

TrustToken (trusttoken.com)

TrustToken’s TrueUSD (TUSD) is the first independently-verified stablecoin backed 1:1 by USD, with billions in monthly volume, nearly instant minting, the lowest transaction fees of any stablecoin, and direct-to-bank redemption. It uses multiple escrow accounts and third-party attestations to provide transparency and prevent fraud. 

HubCulture (hubculture.com)

HubCulture’s Ultra uUSD is a digital asset managed by the HubCulture network as part of the Ultra digital asset system. It can be sent to anyone anywhere with instant clearance and functions similar to Ven, their core asset backed digital currency which features carbon as an underlying component.

Stably (stably.io)

Stably is a Seattle-based FinTech company founded in 2018 that is on a mission to make financial transactions faster and cheaper through a powerful borderless banking platform powered by blockchain, stablecoins and open banking APIs.

Celsius (celsius.network)

Celsius Network lets you earn interest on your crypto and instantly borrow against it. No fees ever. 

SALT (saltlending.com)

SALT, the pioneer of crypto-backed lending, offers crypto-backed loans and custody solutions for individuals and businesses. Committed to fostering adoption of blockchain technology, we’re working to bridge cryptocurrency with traditional finance. With an emphasis on security and customer service, we provide the technology, infrastructure, and tools that make it easy for crypto holders, businesses, banks, and governments across the globe to participate in the blockchain economy. Founded in 2016, SALT is headquartered in Denver, Colorado. For more information, visit www.saltlending.com or follow us on TwitterFacebook and Medium.

MAPay LLC (mapaycorp.com)

MAPay is a global healthcare fintech company that deploys distributed ledger technology to power smart contracts and secure medical transactions. The company has developed a hybrid architecture of both centralized and decentralized protocols for multi-party medical payments and HIPAA-compliant data exchange. MAPay is working in association with large-scale hospital networks, top practice management systems, and several insurance payers and government entities. The company is committed to empowering patients and healthcare providers by leveraging blockchain technology to improve and align incentives, reduce costs, and bring increased transparency and data exchange. The company believes in permissionable open-sourced system collaboration, and solution sets that are economically and socially impactful. For more information, please visit https://www.mapaycorp.com/

Sablier (sablier.app)

Sablier is a decentralized app for real-time salaries on Ethereum. We give employees instant access to their earnings, so they don’t have to wait up to 1 month to get paid for 1 day of work.

Stablehouse (stablehouse.io)

Stablehouse Limited (SH) is a digital exchange and global centralized stablecoin clearinghouse incorporated in October 2018.  Its mission is to facilitate cross-border payments, remittances and merchant payments for its users to trade stablecoins for real-time cross-blockchain payments.

Investment, ecosystem and tool providers

ConsenSys (consensys.net)

ConsenSys, a leading blockchain technology company includes ConsenSys Labs, which is helping unlock opportunities for entrepreneurs and Codefi Payments which provides tools that make it easy for governments and merchants to accept digital payments.