Prime Minister of Bermuda on the state of cryptocurrency regulation in the country | Video

Spot ETFs and the development of the Fit 21 Act. We continue to look at how other governments approach cryptocurrencies as they join us. Now to chat is Bermuda, Prime Minister David Burt, Prime Minister, welcome to the program. Lemon balm. It’s nice to see you again. You’re back to consensus for 2024. I have to ask what you’re looking forward to, given what’s happening in the market. It’s a little different feeling than last year. I think so. I mean, my first consensus was in 2018. So I’m kind of old at this, you could say. Uh, but from the perspective of what we’re doing in Bermuda, we’re just here to see uh companies. We know we have great companies on offer in Bermuda. We know that people have been able to do things in Bermuda that they have difficulty doing in other jurisdictions around the world and that we have provided regulatory clarity since 2018 with names like Coinbase and Circle and others who are inside and those who will join to us . We are just happy with the progress and we are here, our regulator is here, the head of our regulatory agency is here. Our other regulators are service providers and we are just here to make sure that people who want to do business internationally know they have a home in Bermuda. So typically Bermuda would announce a partnership with a company called Guia. He just told us a little bit about what it means, what it looks like and what it will mean for Bermuda in the future. Well, I think it was a really important announcement that we are a subsidiary of Bank Colombia. They are and have launched a stablecoin, Colombian rap RT Peso in Bermuda, in line with our regulatory regime. This is just an example of the type of regulation that we have in place, where a company outside of Colombia has determined that the best place to launch a stablecoin for the Colombian peso will be in Bermuda, which will be regulated and will be able to use it and expand it. From that perspective, these are the kinds of important pieces of work that Alpha, which has been working with Bermuda for a long time, has also done. From that perspective, it just shows the things that we are able to do within our regulatory system that, frankly, can’t be done in many other places in the world. Talk to me about how it works, right? Guia is a Colombian subsidiary of Bank Colombia, but regulated in Bermuda. How it’s working? How it’s working? How does it work, how does it work? How, why is this and why is this Colombian subsidiary regulated in Bermuda? What protections do Bermuda and Colombian citizens have and who will use the product? Well, I think that’s a very important question and we need to remember Bermuda’s history. Bermuda is one of the most respected international financial centers in the world, which is why global banks and other companies come to Bermuda with confidence under our regulatory system. Look, we have some of the largest insurers in the world. We have asset managers in Bermuda and now we have large digital asset companies realizing how they can operate in digital finance to serve global markets. To be regulated on the Bermuda Monetary Authority, you must be a Bermuda company. They set up a subsidiary and they can do something there because they’ve checked all the other jurisdictions around the world, all the other places. And they said this is the right place where we can actually issue stablecoins. So they are not the only stable coin. I mean, there’s Mountain Mountain Protocol that does other things there, you know, so we were doing different things in Bermuda and pushing it, I would say, the innovation envelope. So one thing that’s really interesting to me, a lot of jurisdictions, uh, I mean a lot, there are countries that would panic that, you know, at the thought of a stablecoin being pegged to, you know, another country’s currency. We’ve seen, you know, these things are banned in some countries. Well, you know what comforts you about that. So, uh, you know, when you’re so flexible that it’s a product that you’re, you know, totally cool with. So our regulator is really good at focusing on the risks inherent in each technology rather than trying to, you know, pigeonhole something. That’s why we check what the risk is. Our regulator identifies those risks and makes sure that those are managed to ensure that the people who hold those assets are protected, to ensure that, you know, security risks are addressed, to make sure that the AM L address. So that’s what we did . Um, and we were successful at that. It’s important to know Nick like you understand him. We’ve been doing this since 2018. It’s not like we’re just figuring out how to do it. We’ve been doing this for a very long time. We’re kind of, you know, I guess you could call us the ogs when it comes to regulation and cryptocurrencies. But from this perspective, we are proud of what we have achieved and companies are taking notice. I asked Robert about this earlier, how closely are you watching other regions that are courting three online hubs. They really focus on regulation. They’re really focusing on crypto companies starting up perhaps in other places where there aren’t as clear regulations regarding their jurisdiction. How closely do you watch them and what gives Bermuda a competitive advantage. So from that perspective, we’re not necessarily trying to compete with, um, you know, in 2018 we had our first consensus, which was more about the company’s strategy, um, from a country perspective. However, we realized that because of our high standards, we cannot be all things to all people in all companies, we want well-established brands to know what they need to do to ensure they can meet the demands of our control regulatory body. You have to remember that when it comes to AM L for example, we start from there, there were no Fat F rules, we had to come up with our own. And when Fat F presented his principles, our principles were actually higher than theirs. So we had to relax our rules to basically be compliant, we know how to do that in the regulations. So other jurisdictions may, but if you look at companies like Coinbase who will look around to see all the things, or like wea who will look around our Columbia bank to see all the different jurisdictions, they will choose quality. We don’t try to choose low rates, we want the best companies because the future is long-term digital finance. What you see here, according to the consensus, is the innovation of the economy of the future. Bermuda has always been a home to innovation and we intend to continue to attract those companies that want to be truly credible to their shareholders and credible to the investors who want to raise that money. And having a regulatory seal issued by Bermuda is the best ticket to do just that. So looking forward, you know, one of the conversations I have with people all the time is, every time you think you’re into crypto, they come along and write some other, brand new novel, you know, weird thing. Um, how do you imagine, you know, continuing to adapt and update, you know, any regulatory framework that you’re going to have to deal with, you know, new products using leverage or, um, tokenization, you know what not? That’s a great question. Hmm, if we talk about leveraged products, we have been regulating profit-generating products for three years. And so we had people who had been releasing Bermuda products for a while. But when we talk about what will happen in the future, our next step will certainly be to focus on digital identity. We’re looking at it from the perspective of a regulatory problem and a technology problem where we’re going to license digital identity service providers and people with these particular credentials will be able to reach you, but we’ll be able to, you know, have more seamless access to access through AM L controls, etc. This will help our companies in the… um… space deal with compliance costs, as compliance costs are a challenge for all regulated industries. Hmm, I would say regulated markets, but our perspective is there. So if you look at our history, we started with the basics, then we added transparency in derivatives, and then we added transparency in staking and lending. Now we’ll look at digital identity. We’re also looking forward to seeing how we handle PS and things like that. So for us it is a constant evolution. But the important thing to remember is that this is not new. We have been doing this since 2018 on the topic of digital identity. I want to move this a little bit to left field. I know that some Latin American countries are actually implementing digital identity protocols in their government services. And now that you’re looking at digital identity from the regulatory side, will the government consider implementing digital identity, um, so that people can have better access to some of the government documents that are so difficult to obtain? I don’t know if you’ve ever tried to get a birth certificate or marriage certificate. That’s nice, it’s quite a labor-intensive process from a government credentialing standpoint. Uh, we do this in our health care sector where we spend, uh, things and things can grow. But I think it’s important to note that whether it’s the approach from which we approach CBD CS and stablecoins, where we don’t want to issue them, we allow the private sector and anything that is regulated to be accepted by the governor of Utah or whether we look at the path we are taking in the digital identity space where anyone who has the regulatory authority to issue it will be accepted in Bermuda. We think it’s a better way of working. We believe that it is better for the market to move forward and introduce such solutions, rather than the government doing so. And that is Bermuda’s unique proposition because, as you know, we are a very small country, 20 square miles, 65,000 people. But we’re the perfect testing ground for companies to say, go ahead, let’s do this so we can scale globally. People will not make significant money trading in the Bermuda market. However, if they achieve perfection in the Bermuda market, they will be able to raise capital and scale these things globally. And on that we intend to be fine, Prime Minister, as you know, we have reached a consensus on 2024. We are having lively discussions here all day before we release you. What are you looking for? It doesn’t have to be anything official. Plus, there’s a lot going on outside of what’s happening here. Uh, I think there will be a karate fight tomorrow. What are you looking for? Yes. Uh, there’s a karate fight tomorrow. I mean, I’m here, uh, right here, as I said, with a delegation, we have a 20-person delegation that came here from Bermuda with our regulator, our law firms, our service providers, our concierge service people and we’re going to meet with companies in this industry that want to develop. I mean, consensus is something I’ve been doing for a while. I like it, I meet friends like Robert and others. So I’m just looking forward to it and then, um, unfortunately, I won’t be here on Friday because I have to leave bright and early to get back to Parliament on Friday in Bermuda. So I can’t have, um, I guess all that experience, but I’m happy to be here with the prime minister of my team. It was nice to talk to you again in consensus. Thank you for joining us. It’s good to see you again. It was the Prime Minister of Bermuda, David Bart.