Bermuda is well known as a global center for financial services as the island operates the largest reinsurance market in the world. Now, Bermuda is aggressively diving into the fintech sector with two clear objectives: to promote the island as the jurisdiction of choice for fintech entrepreneurs and to establish its new regulatory framework as the universal standard for initial coin offerings (ICOs), digital assets and virtual currencies. By doing so, Bermuda’s Premier and Minister of Finance E. David Burt hopes to diversify Bermuda’s economy and encourage new development ― monetary, educational and cultural ― in the island.
If recent developments are any indication, Bermuda is perhaps well on the path to quickly becoming the global leader for the issuance of digital assets. When discussing international interest in Bermuda’s initiative, the premier has stated, “Bermuda’s leadership in the development of a fintech industry supported by a sound regulatory base is attracting the attention of the world. This government’s determination to produce the right framework for growth in this area has set a high standard.”
Bermuda’s Innovative Digital Assets Regulatory Framework
While some nations have inhibited the development of digital assets (e.g., China and South Korea), most others have not yet passed legislation germane to the asset class. Bermuda, in contrast, seeks to set the market, implementing a comprehensive and prudential regulatory framework designed to create a supportive business environment that fosters development. The government has collaborated with a partnership of regulators, external consultants and other private sector representatives to develop a best-in-class system that will serve as the standard for other jurisdictions (the Bermuda Standard).
Bermuda has passed legislation that it believes will establish the necessary regulatory framework to guide its initiative. The legislation governs two distinct categories of business:
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issuers who launch ICOs for their own crowdfunding purposes, which
