The founder and chief executive officer of a fintech firm that is to set up on the island has told a US Senate Banking Committee that the regulatory approach taken by the Bermuda Government “can and should be emulated by other countries”.
Jeremy Allaire’s fintech company, Circle, will create more than 30 new jobs in Bermuda over the next two years, he said last week.
Yesterday, Mr Allaire was the only crypto industry executive to testify before the Senate committee.
He said an uncertain and restrictive regulatory environment has led many digital asset projects and companies to domicile outside of the United States and to block US persons and businesses from accessing products and technologies.
In Circle’s case, he told the Senate committee, the firm has begun the process of moving its international-facing products and services into a licensed Bermuda entity.
“Bermuda’s forward-looking Digital Asset Business Act provides a comprehensive regulatory framework for companies offering this new type of financial service,” he testified. “We believe that the approach the Bermuda Government has taken can and should be emulated by other countries.”
He told the Senate committee that there were several positive aspects to Bermuda’s regulatory framework.
“They have established a comprehensive national policy for digital assets businesses,” he testified. “Rather than try and fit digital assets into banking and payments or securities and investments laws, they established a new set of laws specific to digital assets, including a new set of definitions of what constitutes digital assets, reflecting the dynamic and multifaceted nature of this new asset class.
“The licensing and supervisory framework is broad, spanning digital asset activities including storage and custody, payments, dealing and trading, and operating exchanges. Compared to a patchwork of regulators here in the United States, across the federal government and the states, there is a single regulator to supervise firms.”
He added: “There is an acknowledgement from both policymakers and regulators that this is a dynamic and fast moving field with constant technology and business model innovation, and they have committed to proactively working with industry to evolve the laws and supervisory requirements as the market grows and matures.
“The core of the risks they are focused on regulating are in our view the most important risks — enterprise risk, financial crimes risk, cybersecurity risk, and custody risk.”
Mr Allaire’s crypto-finance firm was the first to get a full licence under DABA, which came into force last September.