This week’s Blockchain Futurist Conference may have taken place in Canada, but you’d be forgiven for thinking Bermuda was the host.
Clad in bright red Bermuda shorts and long dark socks, Wayne Caines, Bermuda’s Minister of National Securitywas a ubiquitous presence on the second day of the Toronto event, appearing in panel discussions on regulation and the transformation of capital markets. His attendance underscores Bermuda’s business-friendly approach to regulating blockchain and cryptocurrency startups.
BERMUDA HAS LONG BEEN AN OFF-SHORE PARADISE FOR REINSURANCE AND FINANCIAL SERVICES FIRMS. NOW IT’S FOCUSING ON CRYPTOCURRENCY AND BLOCKCHAIN STARTUPS.
Several speakers publicly thanked Bermuda’s government for its support. A session with Polymath, meanwhile, included mention that it held a roundtable discussion on a security token standard in Bermuda.
Banking Act Amendment
The self-governing British Overseas Territory has been busy making changes to make it attractive to the blockchain industry. Last month the government proposed amending its Banking Act to create a new class of financial institution that would cater to blockchain and fintech companies. Meanwhile, a set of regulations on initial coin offerings (ICOs) stipulates what kind of information issuers need to submit in order to move forward. In May, Bermuda passed the Digital Asset Business Act 2018 (DABA), which will put those providing services such as crypto wallets or electronic exchanges to be regulated under the Bermudian Monetary Authority.
According to Caines, Bermuda has a long history of focusing on sectors such as reinsurance and financial services. The rise of blockchain and cryptocurrency has forced the government to look at how it can achieve similar success with a new generation of entrepreneurs who might otherwise have struggled to work with local banks.
“Over the last 60 years, we have traded on our reputation, and we think that is very important when it comes to the ICO legislation,” he told the Blockchain Futurist audience. “We’re not trying to attract everybody. We want to make sure we attract companies that want to operate in the bright light of openness and transparency.”
‘Concierge’ Services
Caines said Bermuda’s approach is similar to a “concierge service,” where the government brings together lawyers, policy people and other stakeholders in a room with startups to help accelerate their ability to set up shop. The process includes submitting a white paper to its fintech advisory committee, which is made up of CTOs and other technical advisors. Unless there are hiccups in the due diligence process, Caines said some firms have been able to be fully registered and operational in Bermuda within less than six weeks.
Bermuda’s stance drew praise from other presenters at the event, including Stuart Davis, chief anti-money laundering officer at Bank of Montreal (BMO) Financial Group.
“In North America, governments are mostly trying to fit existing regulations or guidelines and put them on top of what’s happening with blockchain and crypto,” he said in a panel discussion. “When you look at Bermuda, they’re saying, ‘Let’s just create a whole separate regulation.’”
Eyes on the Road
Beyond the legal and regulatory moves, Caines said Bermuda is introducing educational programs that ensure even elementary schoolchildren understand what blockchain is and how cryptocurrencies work. A partnership with Shyft, meanwhile, will bring blockchain education to local businesses through the territory’s Workforce Department.
Caines likened the evolution of traditional financial services to blockchain and cryptocurrency to the shift from horse-drawn carriages to Ford’s Model T automobile.
“Rather than complain like the men who were selling horses, we are focused on what’s coming onto the roads,” he said.