October 2019 has been a busy month for the FinTech sector in Bermuda with the inaugural Bermuda Tech Week and the amendment of the Digital Asset Business Act 2018.
The development of the FinTech sector has been a focus for Bermuda in recent years and the efforts of the Government of Bermuda, the Bermuda Business Development Agency (BDA) and the Bermuda business community has led to Bermuda being the offshore jurisdiction of choice for those who are looking to benefit from the credibility of a regulated jurisdiction.
The hosting of Bermuda Tech Week, a week of conferences focused on all aspects of the technology sector, enabled industry participants to explore the opportunities and challenges currently faced by global technology businesses and showcased Bermuda's role in the future of the industry.
The Digital Asset Business Amendment Act 2019 (Amendment ACT) became operative on 8 October 2019. The Amendment Act amends the Digital Asset Business Act 2018 that became operative on 10 September 2018 which regulates the digital asset sector in Bermuda. The Amendment Act gives greater clarity to the regulation of the sector in Bermuda and demonstrates Bermuda's ability to respond swiftly to the needs of the industry.
The Amendment Act replaces the existing definitions of "exchange", "digital asset services vendor", "market maker" and "qualified custodian" to give clarity as to their meaning and the expectations of the Bermuda Monetary Authority (BMA) in respect of those activities.
New provisions have also been adopted that give the BMA the discretion to waive or reduce digital asset licence fees, provided certain criteria is met.
Finally, the Amendment introduces new classes of licensed activities:
- A "digital asset benchmark administrator" which is a person that controls a digital asset benchmark, being an index or figure used to calculate the amount payable under a digital asset;
- A "digital asset derivative exchange provider" which is a person that creates a marketplace for digital asset derivatives issuances, distributions and trades; and
- A "digital asset trust services provider" which is a person who carries on the business of acting as a fiduciary, agent, or trustee on behalf of another person for the purpose of administration and management of a digital asset.
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