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Cryptocurrency Initiative

Wednesday, November 22, 2017
The Hon. David Burt

Good morning members of the media. Today I am pleased to update international investors and our local community on the work that the Government of Bermuda is doing in an important area of technological advance that is happening globally. 

There has been a lot of attention and focus globally on advances that have been made using Distributed Ledger Technologies (DLT). Recognizing the opportunities for economic growth that this area of the technology industry can provide I have directed that the government move aggressively in this area to ensure that Bermuda and Bermudians can benefit.

To make this a reality, Bermuda requires a regulatory framework for Distributed Ledger Technologies which will become operational in early 2018 which will regulate the activities of firms, operating in or from Bermuda, that use DLT to store or transmit value belonging to others, such as virtual currency exchanges, coins and securitized tokens.

To advance this project, responsibility for ICT Policy and Innovation has been transferred to the Minister for National Security - Minister Wayne Caines. A Task Force has been set up, under the direction of the Minister of National Security, to develop and implement a strategy that aids Bermuda in entering this exciting area.

The challenge will be in figuring out how Bermuda can set-up an industry that ensures cryptocurrencies are well-regulated, is a safe environment for cryptocurrency firms to grow, whilst also ensuring that this new regulatory environment protects both consumers and the reputation of the jurisdiction with specific attention being given the out Anti Money Laundering and Anti-Terrorist Financing Obligations.

The Task Force will be broken up into two teams: a Business Development Working Group and a Legal and Regulatory Working Group.  Members of the Task Force will comprised Government technical officers, officers from the BDA, as well as legal and industry specialist in FinTech. I am pleased that some have joined us here today.

Ms. Lydia Dickens, Director of the Business Development Unit in the Ministry of Economic Development and Tourism will lead the Legal and Regulatory Working Group.  

Mr. John Narraway of the Bermuda Business Development Agency will lead the Business Development Working Group.

Immediate responsibilities for the Task Force include:

  • Creating a Crypto Currency Association with a defined Code of Conduct and Rules of operation.  The Bermuda Crypto Association is in the process of being formed and our aim is for this Group to be self-governing.
  • The Bermuda Monetary Authority in conjunction with the Ministry of Finance will work together to draft a letter or document confirming; Utility Tokens are not a security as long as there is no promise of future value.  This will allow companies from all over the world to set up in Bermuda for Crowd Funding

Most importantly, the Legal and Regulatory Working Group will provide confirmation that Utility Tokens are not prohibited or contravening any local legislation.

Bermuda is committed to building upon its position as an innovative international business centre and is considering a complementary regulatory framework covering the promotion and sale of utility tokens, aligned with the DLT framework. 

Anyone considering launching utility tokens from Bermuda is advised to consider the following guidance; Bermuda-based Token Issuers must join and comply with code of conduct of the Bermuda Crypto Association, which includes measures to ensure enhanced business transparency, KYC and AML.

Given the continuous and rapid nature of this innovative technology and distributed financial system, Bermuda will craft an agile and effective means for regulation and compliance for DLT as the Island has done for other industries such as insurance for decades.

I want Bermudians to understand that this is not just pie in the sky. The Government has put real effort into this matter already and it has yielded tangible results. The work done to date has already secured the commitment of a crytocurrency trader to establish a physical presence as a result of action the government took following a meeting in New York earlier this years.

In addition to that company, today we are joined by Aron Dutta who, following meetings with Government Ministers, have confirmed that they will be setting up operations in Bermuda. They are joining us here today and I will ask Aaron Dutta to say a few words.Thank you Aron.

The message that I want to send today is that we want the world to know that Bermuda is a significant option for Blockchain and cryptocurrency related businesses and that we are expeditiously developing rules that ensures cryptocurrencies and related tokens are well-regulated, is a safe environment for those firms to grow, whilst also ensuring that this new regulatory environment protects both consumers and the reputation of the jurisdiction.

I am happy to take your questions.

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