Despite the recent turmoil in crypto markets, Bermuda’s Minister of Economy and Labor, Jason Hayward believes that the island could become a crypto hub.
“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 Hayward.
The crypto market has fallen more than 50% since its November record high due to the crash of the stablecoin Terra Luna and TerraUSD.
He feels that this market downturn will aid Bermuda’s goal and positively impact the island’s long-term growth and impact in the crypto sector.
Hayward also states that Bermuda has been expanding its financial services and crypto industries since 2017, and preserved through the 2018 market crash.
The recent market crash highlights the importance of oversight and risk mitigation, according to Hayward.
The president of the Financial & International Business Association, David Schwartz said that Bermuda is leading the path for ‘establishing an infrastructure for the crypto industry, passing a comprehensive framework for regulating digital assets and tightening up its anti-money-laundering controls.’
However, he feels that it is not just about the regulations and laws but about how the authorities of Bermuda implements them.
Since 2018, Bermuda has implemented several crypto regulations, including the requirement of crypto businesses to acquire approval from the Bermuda Monetary Authority (BMA) to operate on the island.
The BMA grants licenses in three stages: a test license, a modified license and finally a full license.
The licensing requirements of the island include a thorough examination of the crypto company’s risk-management, governance and cybersecurity.
Also, compliance with anti-money-laundering and counterterrorism financing regulations is compulsory.
So far, BMA has granted licenses to only 14 crypto firms, with four of those being approved in 2022. Circle, BlockFi, and Bittrex are a few of license holders allowed to conduct operations in Bermuda.