In order to keep pace with this rapidly evolving sector, the 2020 Amendments were introduced after thorough consultation with Fintech industry participants and result in the introduction of a new class of licence to facilitate pilot and beta phase product development and testing (Class T Licence), as well as greater clarity around defined terms and the application of DABA by the Bermuda Monetary Authority (BMA). The 2020 Amendments include, but are not limited to:
(i) Introduction of a new Class T Licence;
(ii) Clarifying the definitions of Digital Asset Exchange and Digital Asset Derivative Exchange; and
(iii) Extending the BMA’s ability to modify applicable fees.
A Class T License will allow Bermuda’s digital asset business regime to support and foster all stages of innovation in the evolving digital asset business sector. The purpose of the Class T Licence is to promote the pilot or beta phase testing of a minimum viable product/service. It is proposed that applicants must: (i) develop success criterion for the test, (ii) list their pre-identified or targeted customers or counterparties, (iii) hold a minimum capital of at least $10,000, and (iv) ensure that appropriate risk disclosures for potential counterparties are in place.
The 2020 Amendments have also included consideration for the passing of the Digital Asset Issuance Act 2020, on 6 May 2020, whereby the BMA’s authority was extended to create rules prescribing prudential standards in relation to the accreditation of digital asset business.
Please reach out to your usual Appleby contact or a member of the team below if you have any questions or would like any further information.