LeapRate Exclusive… The global elite and their private jets flew into Davos, Switzerland, last week for the 2019 World Economic Forum Annual Meeting to review, discuss, and debate the pressing world issues of the day.
Occasionally, the setting provided an excellent platform for individual leaders to speak to personal items of high priority in their own regions of the planet. Bermuda Premier David Burt announced that his island country’s commitment to cryptocurrencies and blockchain technology will expand into the banking sector.
Beginning as early as next week, a crypto-friendly Bank that accepts blockchain and crypto businesses will open its doors in Bermuda. In a private interview with journalist Priya Patel of the BBC, Bermuda Premier David Burt said:
I’m proud to say that next week we’ll be making an announcement revealing that a bank will be set up in the country that will start accepting crypto and blockchain companies.
One of the major stumbling blocks for crypto and blockchain companies has been access to the banking industry for basic banking account services. One case in point is India. While government officials debate the benefits of blockchain technology and digital currencies, the Reserve Bank of India has prohibited banks in the country from dealing with crypto-related companies. Even in crypto-friendly Malta, which has suddenly become the world’s exchange trading volume leading country, banks have chosen to remain hostile.
Bermuda, a British Overseas Territory in the North Atlantic with a population of 65,000, has a reputation as a banking and financial services center of the world. It is self-governing and has openly welcomed crypto businesses with accommodative legislation for Initial Coin Offerings, exchanges, and related services. Premier Burt has noted in the past that the government modeled its approach along the same lines as it had with the insurance industry, an area where Bermuda is now a major global player.
These legislative changes have already borne fruit. Will McDonough founded his new cryptocurrency, iCash, on the island due to the favorable environment. Binance, the world’s largest crypto-exchange, has also shown interest in Bermuda. Zhao Changpeng, Binance’s CEO, visited the island in mid-2018 to announce a $15 million investment to set up a crypto-compliance center for his exchange network. He actually wore a tie and blue Bermuda shorts at the signing and subsequent photo-shoot.
Bermuda, however, is not alone in what has been called a “crypto arms race” among a select group of international financial centers. A competition of sorts has arisen, while developed countries and their central bankers took a hard line on cryptocurrencies and how to accept blockchain development efforts under present regulations. Although hard positions have softened of late, crypto executives have continued to look for more receptive environments. A brief list of current contenders includes Bermuda, Gibraltar, Malta, the Marshall Islands, the Seychelles, and Switzerland.
For the time being, Bermuda is in the crypto limelight, after working diligently behind the scenes. Even after adopting crypto-friendly legislation, Premier Burt had noted:
Despite the robust regulations put in place, to date our four local banks have been unwilling to offer services to newly incorporated fintech and distributed-ledger technology companies. This is a problem that we must fix or else Bermuda will not be able to realise the possibility of economic growth that can come from a fintech industry on our shores.
Burt flew to New York last October in search of potential banking partners. It appears that those efforts were productive and possibly “fixed the problem.”
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Exclusive: Bermuda to open special bank that caters to crypto-related businesses was first posted on January 28, 2019 at 10:19 am.