Government proceeded to prudently enact the Digital Asset Business Act 2018, which created a framework to regulate digital asset businesses, and the initial coin offering regime, which was embedded in Bermuda’s Companies Act and limited liability company legislation, that provided for companies registered in Bermuda and willing to meet the applicable criteria to seek permission to issue digital assets to the public.

The Government’s commitment to ensuring Bermuda is a leader in the fintech sector has been emphasised by recent changes to the ICO regime.

On May 6, Government enacted the Digital Asset Issuance Act 2020, which replaces the ICO regime as the primary legislation for all digital asset offerings in or from Bermuda.

Previously, digital asset offerings to the public from Bermuda required the consent of the Minister of Finance. However, under DAIA, digital asset issuance will now be regulated by the Bermuda Monetary Authority.

Another change is that all undertakings authorised to launch a digital asset issuance in or from Bermuda are required to appoint a local representative. The person appointed must receive the approval of the BMA, and as such, the local representative must be identified in the digital asset issuance application. Furthermore, the local representative is required to maintain an office in Bermuda.

These developments are important because Government has stated from the beginning that development of the island’s fintech sector will prioritise regulatory certainty, investor confidence, compliance with international know your client and anti-money laundering standards, and the creation of jobs in Bermuda.

The BMA is a globally recognised regulator of various industries; transferring the application process and oversight of digital asset issuances to their purview will ensure the Government’s priorities set out above are met.

Furthermore, the local representative requirement will create jobs locally, while the requirements to be AML and KYC compliant will mean companies looking to apply for a DAIA authorisation will need a compliance officer and staff to facilitate these processes, creating further jobs and opportunities in Bermuda for individuals looking to pursue a career in compliance.

This new framework will ensure that companies authorised to conduct digital asset issuances are of a high calibre, which in turn will bring investors and participants comfort and security in knowing that the projects that they invest or participate in have a level of credibility that is not always obvious in this sector.

In addition to the recent developments in relation to digital asset issuance, the Government has announced a policy that invites international remote workers and non-Bermudian postsecondary students to stay and work from Bermuda for one year.

The one-year residency certificate policy was announced on July 17 by Jason Hayward, the Minister of Labour. It is due to come into effect on Saturday and will allow successful applicants who are able to work remotely from Bermuda, to do so.

While this policy comes in the wake of the Covid-19 virus, and is not entirely fintech focused, the connection and potential benefits for Bermuda cannot be ignored. The policy could provide the perfect opportunity to demonstrate what the island has to offer, while persons looking to take advantage of Bermuda’s fintech legislation can come and experience working remotely from the island.

Share
Twitter LinkedIn Email Save as PDF
More Publications
5 Dec 2022

Business Crime and Investigations in Bermuda: Overview

A Q&A guide to business crime and investigations in Bermuda.

24 Nov 2022

Information Technology, Outsourcing, Privacy & Data Protection

All aspects of Bermuda's economy rely on information technology and data processing - an essential i...

Contributors: Duncan Card
22 Nov 2022

A Look Back on 2022 and What to Expect for 2023

As we approach the end of 2022, we are able to look back and say with certainty that the arena of la...

14 Nov 2022

When will the court enforce a promise?

As we all know, promises are made and broken all the time. What, if anything, can the law do to assi...

4 Nov 2022

Legally speaking: what not to do when outsourcing operations

In the course of my career, I have drafted, negotiated or otherwise provided commercial and legal ad...

1 Nov 2022

The Insolvency Review – Edition 10

The Insolvency Review offers an in-depth review of the most consequential features of the insolvenc...

25 Oct 2022

Bermuda: Mergers & Acquisitions Comparative Guide 2022

This country-specific Q&A provides an overview to Mergers & Acquisitions laws and regulati...

Contributors: Katie Blundy
24 Oct 2022

Directors’ duties on the eve of insolvency

It is common knowledge that directors of companies owe a duty to the company to act in its best inte...

Contributors: James Batten
13 Oct 2022

Employee probation periods: an update

The Employment Act 2000 is the island’s key piece of employment legislation, applicable to employe...

Contributors: Kiara Wilkinson
6 Oct 2022

Centre Stage: Bermuda’s Role In An Insurtech Revolution

Bermuda is rapidly becoming a focus for insurtechs seeking the island’s expertise, the accessibili...