The Government of Bermuda plans to launch a cryptocurrency focused bank and further international support for cryptocurrency and blockchain technology. The news was announced by Bermuda Premier David Burt during a conversation with the BBC journalist Priya Patel at the World Economic Forum in Davos, Switzerland.
“I’m proud to say that next week we’ll be making an announcement revealing that a bank will be set up in the county that will start accepting crypto and blockchain companies,” said Burt.
Cryptocurrency Forward Thinking
One of the major constraints that have impacted crypto companies in the past has been the access to the financial institution. Cryptocurrency transactions are encrypted. They can be tracked to a certain extent, but the currency provides a way to keep money and transactions secretive and out of sight for regulators.
There is a certain risk the funds could be used to fund criminal activity or terrorism. Plus, they can be used to circumvent capital controls, companies investing in cryptocurrency could avoid taxes, penalties, and even possible seizure if a government suspects wrongdoing.
Bermuda is being proactive in making cryptocurrency less of a mystery and more of an opportunity. Last year the country implemented the Banking Act to establish a new class of bank to provide the basic banking services to blockchain and cryptocurrency organizations.
Since the amendment, the island nation has recorded some positive development in the crypto sector. Icash, Will McDonough’s new cryptocurrency firm, launched in Bermuda last year and Binance, a cryptocurrency exchange, announced that it would be the setting up its global compliance center worth $15 million in the country.
However, even with the legislative step, some banks refused to comply. Premier Burt thinks this special bank will tackle the problem.
“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 realize the possibility of economic growth that can come from a fintech industry on our shores.”
Countries Leading The Way
Countries like India have been reluctant to go all in with cryptocurrencies. India went so far as to issue a warning to all financial institutions not to have any dealings with cryptocurrency firms. It is tricky when one considers the fact that is not really a legal tender of any nation. There is no institution behind cryptocurrency and it’s hard to determine the exact value from country to country.
With this announcement, Bermuda joins a handful of countries embracing cryptocurrency. The other big leaders? Japan has successfully implemented a licensing system for cryptocurrency exchanges and Russia is also looking into how to properly regulate their exchanges. Malta, Chile’, and Switzerland are also trying to make their banking institutions friendlier to cryptocurrency, with limited success.
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