Bermuda is increasing its cryptocurrency profile, having approved certification for the island’s first Initial Coin Offering (ICO).
Minister of National Security Wayne Gaines announced that fintech company Uulala was to be the island’s first, under the government’s new legislation designed to regulate cryptocurrency and blockchain ventures.
The new legislation put into effect by the Premier and Minister of Finance of Bermuda David Burt now requires companies issuing ICOs to register details regarding all participants, the project itself, target audience and proposed funds targeted for ensuring its success, along with further technical details.
Also, recent changes to the Banking Act will create a new class of banks that will work specifically to cater to blockchain and fintech companies, combating the current dismissive nature of the banks. The traditional financial sector in Bermuda has been unwilling to provide blockchain startups with banking services, referring to legal and regulatory barriers as justification for this, prompting Premier Burt to introduce these changes in support of economic growth.
Bermuda’s Minister of National Security, Wayne Caines believes that the industry needed well-rounded regulation before it could flourish. He maintained that the BMA had 20 companies in London waiting to do business, commenting that “it’s actually phenomenal”.
Caribbean governments and businesses are showing increasing interest in currencies like Bitcoin. In recent years, due to slow growth and high debt rates, major US banks have become more reticent about doing business in the region, frequently withdrawing capital from Caribbean markets. This has created a deficit of banking services inciting local banks to engage in illegal activities such as facilitating money laundering.
The sluggish economy and the tourist industry on which it mostly survives needs a boost, and Bitcoin is proposed by some as a way of energizing it. The Caribbean Tourism Organization plans to introduce cryptocurrency payments for tourist services and integrate Caribbean economies in the region through the use of virtual currencies.
“Tourism is the largest single contributor to the Caribbean economy. It is absolutely critical to every single Caribbean nation’s well-being and development. We see this as a very natural and necessary association,” said Rawdon Adams, CEO of blockchain payment startup Bitt.
The Bermuda Royal Gazette suggests that Uulala is targeting unbanked and underbanked Bermudans, and in doing so aims to provide far more financial inclusion in the banking sector. CEO Oscar Garcia has a $50 million target for its ICO, with $10 million already raised privately, although the firm had to wait four months for its operating licence. He commented:
“Bermuda is known as a financial hub and it is very forward thinking on blockchain and fintech… They have a reputation of being excellent regulatory stewards and we thought that would be a better fit for us than a jurisdiction where we could say we’re good, they’d believe us and give us approval in three weeks.”
In order to promote a blockchain friendly environment, the premier has also signed a memorandum of understanding (MoUs) with blockchain and industry players on the island in a push for creating related employment.
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