Government officials in Bermuda are making amendments to its Banking Act, which will pave the way for a new class of banks that will cater fintech and blockchain companies in the British overseas territory. The goal, according to a Finextra report, is to put Bermuda on the map “as an outlier destination for fintech innovation.
The move to have a special line of banks to handle blockchain came after local banks in Bermuda stopped giving banking services to blockchain and fintech companies. According to reports, local banks were concerned about regulatory issues and potential risks. To solve this problem, the government reportedly consulted with the banks on the potential amendments to the existing banking act.
The Bermudian premier and Minister of Finance, David Burt, introduced the bill to the Parliament in hopes of improving the current virtual currency landscape in the country. Burtsaid that the new law would help new businesses that were frustrated by the situation. He further added that Bermuda plans to expand its economy, and blockchain provides the country with a great opportunity for growth.
“The fintech industry’s success globally depends on the ability of the businesses operating in this space to enjoy the necessary banking services,” Burt said, according to the news outlet. “In other jurisdictions, banking has been the greatest challenge and for us in Bermuda, it is equally so and therefore it must be resolved.”
Since banks in Bermuda stopped offering services to blockchain-related companies, some startups have moved to other markets that are fintech-friendly. Introducing the new class of banks will allow new startups in the country to thrive and help grow the economy. It will also open up innovations and creation of new job opportunities.
In the recent months, Bermuda has taken up various measures to build its crypto market. In April, Bermuda released a paper on their insurance sandbox and innovation hub. The paper outlined how entities can test out their products and services in a controlled environment. The policy was extended to accommodate blockchain and related technologies.
Government efforts to make Bermuda a blockchain hub seem to be bearing fruit. Last month, cryptocurrency exchange Arbitrade announced its plans to conduct an initial coin offering in the country. According to reports, the company plans to launch the Arbitrade platform in late August.
Recently, Burt signed a memorandum of understanding with Binance, the largest crypto exchange, which provided Bermuda with $10 million to fund university blockchain development and compliance training. The agreement also included an addition $5 million investment fromBinance to local blockchain companies.