Bermuda Digital Assets Business Act Comes Into Force

Bermuda has a long-standing reputation for conservative and effective supervision and regulation in the financial services sector and currently operates one of the largest (re)insurance markets in the world. The approach of the financial service sector’s regulatory authority, the Bermuda Monetary Authority (the “BMA”) and the Bermuda Government has historically been to collaborate with industry to actively foster innovation within the regulatory environment.

The Bermuda Government is now well underway to implementing its strategy, announced in November 2017, to embrace blockchain technology and digital currencies, with a view to leveraging the island’s significant expertise in regulatory management and to introduce pioneering legislation designed to create regulatory certainty, investor confidence and compliance with international standards.

The Digital Assets Business Act 2018 (“DABA”) became operative with effect from 10 September 2018, creating a legislative framework for digital asset business and services to be operated within a regulated environment in or from within Bermuda.


Scope of DABA
DABA regulates the following ‘digital asset business’ activities where they are conducted by any entity in or from within Bermuda (whether or not incorporated or formed in Bermuda):

  • issuing selling or redeeming virtual coins, tokens or any other form of digital asset
  • payment service provider business utilising digital assets
  • operating an electronic exchange whereby digital assets of any type are exchanged for cash or other digital assets
  • provision of digital assets custodial wallet services
  • digital asset services vendors

The term ‘digital asset’ is widely defined and covers anything which exists in binary form and comes with the right to use it and includes a digital representation of value. It captures digital coins, security, equity or utility tokens and anything intended to provide access to an application, product or service by means of distributed ledger technology.

 

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BERMUDA (TAYLORS)
Jonathan BettsPartner - TaylorsT +1 441 242 1511jonathan.betts@walkersglobal.com
Natalie NetoPartner - TaylorsT +1 441 242 1533natalie.neto@walkersglobal.com
Rachel NightingaleAssociate - TaylorsT +1 441 242 1520rachel.nightingale@walkersglobal.com