Bermuda Issues Draft Cryptocurrency Custody Rules
The purpose of the code of practice is to offer protection to the public while clarifying the expectations of the authority with regards to digital assets custody. The financial services regulator has set January 18, 2019 as the deadline for receiving feedback, according to a statementissued by the BMA.
Per a senior adviser at the Bermuda Monetary Authority, Moad Fahmi, the Code of Practice for Digital Asset Custody will benefit the country’s financial system:
Global Regulatory Leadership Ambitions
Bermuda’s Code of Practice for Digital Asset Custody has been issued as part of the island’s efforts towards becoming ‘regulatory leaders in digital assets’ as the managing director in charge of supervision at the BMA, Craig Swan, stated.
Other efforts by the British island territory to become a darling of the cryptocurrency sector have included amending the banking act with a view of attracting blockchain startups.
The amendments which were made to the country’s banking act came after the realization that local financial institutions were unwilling to provide banking services to blockchain firms owing to stringent regulations which saw them avoid new risks.
As CCN reported at the time, Bermuda’s premier David Burt, made it clear that his government would not allow the reluctance of banks to welcome blockchain companies as clients to deter the island’s efforts to spur growth by supporting and nurturing new industries such as distributed ledger technology.
ICO Regulations
Earlier in the year, Bermuda outlined a goal to become one of the first nations on the globe to provide a regulatory framework for initial coin offerings. This was disclosed in March by Burt in a parliamentary address:
Bermuda’s efforts to provide a conducive environment for cryptocurrency and blockchain startups have been rewarded to some extent with some investments flowing into the island. In April this year, for instance, cryptocurrency exchange Binance inked a Memorandum of Understanding with Bermuda promising to invest up to US$5 million in blockchain startups based in the country.