Bermuda Remains Committed to Crypto Despite FTX Collapse

Bermuda’s Premier and Finance Minister, Edward Burt, has affirmed the territory’s commitment to digital assets and blockchain technology, despite the collapse of crypto exchange FTX in nearby Bahamas in November 2022. Burt believes that the future of finance is digital, and there are still considerable benefits to be gained from these technologies. He noted that regulations in Bermuda have a minimal impact on the territory, and the regulations are clear and won’t change for any company.

Bermuda, a self-governing territory with a parliamentary government, was one of the first places to implement a regulatory framework for digital assets. It is just 915 miles away from the Bahamas, where FTX once operated, and Burt reportedly faced intense political pressure before the exchange’s failure as it chose the Bahamas instead of Bermuda for its headquarters. However, according to Burt, the latest events in the crypto industry had a minimal impact on the territory thanks to its regulations.

Burt recently met with United States lawmakers and government officials in Washington to discuss common standards for digital assets, as well as topics related to Bermuda’s finance and insurance sectors. He believes that regulators worldwide must work together to provide clarity for emergent technologies.

Despite the challenges, Bermuda continues to show a strong interest in digital assets. The territory recently released its first stablecoin, powered by the Polygon blockchain, in December 2022. The stablecoin focuses on enabling real-time settlements using a stablecoin with a 1:1 peg to the U.S. dollar.

Bermuda’s regulatory framework for digital assets has made it an attractive destination for crypto and blockchain companies. The territory’s government is actively encouraging companies to set up shop there and has implemented measures to streamline the registration process. In addition to the regulatory framework, Bermuda has a strong infrastructure, including high-speed internet, and skilled professionals in finance and technology.

Burt’s affirmation of Bermuda’s commitment to digital assets and blockchain technology is a positive sign for the crypto industry, which has faced significant regulatory challenges in recent years. The territory’s stable regulatory framework and commitment to innovation demonstrate that there are places where crypto and blockchain companies can thrive while adhering to regulations.


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Bermuda’s Jewel Bank Receives Regulatory Approval to Run as Digital Asset Bank

Jewel Bank announced on Tuesday that it has obtained a full bank license and a digital asset business license from the Bermuda Monetary Authority (BMA). The license acquisition has enabled Jewel Bank to become the first digital asset bank in the island nation.

The approval from an integrated regulator of the financial services sector in Bermuda allows Jewel Bank to provide service to digital asset firms in non-sanctioned countries worldwide around, as well as in the US. The Bermuda-based bank will mainly serve the needs of non-US licensed firms, providing them with the essential digital asset banking, fiat on/off ramps, payments, custody, crypto-collateralized lending, stablecoin issuance, and real-time settlement services.

Jewel Bank’s banking infrastructure aims to fill a critical gap in the rising global digital asset market by providing globally accessible digital asset banking.

Jewel Bank has innovated by itself as a direct issuer of fully reserved fiat-backed stablecoins issued against fiat deposits. The digital bank plans to offer USD stablecoin and other single fiat currencies. The bank intends to provide stablecoins “as-a-Service” to other banks and non-bank financial institutions that do not have the same regulatory, technology, and compliance capabilities.

Jewel Bank intends to provide domestic retail banking services in Bermuda and assist in accelerating Bermuda’s digital transformation.

Stablecoins’ Impact on Banking

Stablecoins have witnessed significant growth in the few previous years, serving as a potential breakthrough innovation in the future of payments. The market is proliferating, with new stablecoin issuers putting pressure on banks to dive in.

In January, PayPal announced plans to launch its own stablecoin under the name ‘PayPal Coin.’ PayPal’s move came as Facebook confirmed that it still intends to release its own stablecoin, Diem cryptocurrency.

Government and technology initiatives have driven the value of the stablecoin market up to about $140 billion — seven times higher than two years ago.

In January last year, the Office of the Comptroller of the Currency (OCC), led by former Acting Comptroller of the Currency, Brian Brooks, allowed US federal banks to participate as nodes on a blockchain or conduct payments using stablecoins.

While tech companies have taken the lead in stablecoin participation, many banks are also becoming active developers. The move hints that the stablecoin industry could follow the same path as the mobile-wallet market.

In January, Russia’s largest retail bank, Sberbank, sent an application to Russia’s Central Bank to register its blockchain platform to issue its own stablecoin.

Image source: Shutterstock


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Multi-asset exchange wins crypto trading license in Bermuda

A multi-asset class trading firm in Bermuda has secured major regulatory approval allowing it to offer cryptocurrency trading services.

Over-the-counter trading platform 24 Exchange has acquired a “Class T” digital asset business licence from the Bermuda Monetary Authority (BMA) to roll out cryptocurrency trading on its institutional-grade platform. The firm officially announced Tuesday that the new license was granted under the Bermuda Digital Asset Business Act 2018.

With the newly received license, 24 Exchange is planning to launch physical crypto trading to its institutional clients later this summer. Specializing in foreign exchange non-deliverable forwards (NDFs), or two-party cash-settled derivatives contracts, 24 Exchange also expects to introduce a trading capability with NDFs in Bitcoin (BTC) and Ether (ETH).

In order to secure the license, 24 Exchange has been working closely with the Bermuda Government’s Office of FinTech, the Bermuda Business Development Agency, as well as Bermuda Premier David Burt. The Premier reportedly highlighted that the latest regulatory approval is the “first license of its kind to be issued in Bermuda,” and that the state is looking forward to “having these innovative digital pioneers blazing new trails” in the country.

Founded in 2019, 24 Exchange is focused on providing institutional investors with diverse asset exposures 24 hours a day and at the lowest possible cost. The company intends to expand its platform’s capability in the future to include all possible assets.

Related: Bermuda Premier: Cryptocurrency a great equalizer against big tech

“We intend to expand our platform’s trading capability in the future to encompass all the other assets on our exchange – all at best available rates. 24 Exchange’s unique NDF offering will significantly facilitate the institutional adoption of crypto products across the globe,” 24 Exchange CEO and founder Dmitri Galinov said.

As previously reported by Cointelegraph, Bermuda has emerged as a crypto-friendly jurisdiction in recent years, welcoming operations of multiple global crypto businesses in the country. Last October, BMA granted a “Class F” digital asset business licence to crypto exchange Bittrex Global, allowing it to offer crypto services like futures trading. Bermuda is also reportedly the first government over the world to accept Circle’s stablecoin USD Coin (USDC) for tax payments.