Bermuda’s Crypto Hub Plan Remains Unfazed by Crypto Crisis

Despite the current bear market, Bermuda expressed confidence in its plan to become a cryptocurrency hub. In fact, a large and comprehensive crypto regulation framework is now in the works.

Bermuda’s Minister of Economy and Labor Jason Hayward recently revealed that the tiny island nation famed for its stunning pink sand beaches and favorable tax rules has been aggressively building its crypto industry since 2017.

Hayward told the Wall Street Journal (WSJ) that the recent drop in the cryptocurrency market is not a hindrance to Bermuda’s aspirations to become a crypto powerhouse. That’s actually good for the island’s purpose.

According to Hayward’s comments to the WSJ:

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.

Hayward added that the industry’s slump is likely to help them achieve their aim and benefit their long-term development and involvement in this area.

Bermuda’s licensing procedure, according to Hayward, is separated into three stages: a testing license, a modified license, and ultimately a fully authorized operating license. The testing period would last three months to a year, but the BMA has not said when  it will be getting a complete license.

So far, the Bermuda Monetary Authority (BMA) has issued 14 licenses for crypto businesses to incorporate out of the British island territory, and four of them authorized in 2022, according to Crag Swan, the BMA’s chief executive.

However, one possible impediment to the expansion of cryptocurrency in Bermuda is the industry’s lack of awareness of the anti-money-laundering regulations necessary for a license. Another issue is that banks and insurance companies are reluctant to work with cryptocurrency startups.

The BMA has reacted by offering service providers online training to assist them to grasp the regulator’s anti-money laundering objectives. More banks and insurers, according to Swan, are now embracing crypto-startups as customers.

Financial & International Business Association (FATF) president David Schwartz also told the Wall Street Journal (WSJ) that the Bermuda government has made significant progress in its anti-money laundering ethical compliance since early 2020, but there is still a long way to go.