Sign New York Banking Memorandum Of Understanding Fast

Industry sign banking new york memorandum of understanding secure

[Music] welcome to balancing the ledger we're tech and Finance intersect I'm Jen Viet nur and I'm Robert Hackett today we have the honor of being joined by premier David Burt of Bermuda thank you so much for being with us remember well thank you for having me so you are the youngest premier in the history of Bermuda tell us a little bit about your vision how the job is going so far well I was elected and leave the progressive Labor Party we won an election in July of 2017 and we won election they saw on a mandate to build a better and fairer Bermuda that sounds like something a lot of politicians say but our job is to make sure that we tried to expand economic opportunity at home and look towards the future and how we can make sure that more people are included in the story that is Bermuda made FinTech a big priority for Bermuda tell us a little bit about the strategy behind that how that idea came about well there I was in Bermuda I was not too long after I was elected and there was a company that has formed in Bermuda that has been in Bermuda for a while predating my time as being the premier which was called hub culture and they hosted this innovation campus I went and met the people who were there they were talking about digital assets and so one of the founders he had spoken to me a little bit afterwards and he said this is probably something that Bermuda can play a role in in the future you have a financial services industry this could represent the future of financial services and you should look to see whether or not you can put regulations in place to attract more of these type of companies here and so we took the advice a few more people had said certain things and in November of 2017 we launched our task force and then in 2018 we started putting legislation into place and I think we were the first country in the world that had a full suite of regulations for the digital asset industry from digital asset issuance to also the regulation of companies who want to engage in digital asset trade so whether it's exchanges custody for wallet wallet providers and the like so now the FinTech and digital asset regulations are in place what does the FinTech industry look like in Bermuda now well today we have 74 fin tech related companies that are now incorporated in Bermuda so we have a company who who was granted the rights to issue there's a lesson also a company tribe OS there's a company called diamond standard that is going to be the first company in the world to commoditize diamonds and it's kind of incredible on how they're able to I would say use blockchain to enable these type of things which we were never able to do before there's a number of companies that are in various stages of doing different things in Bermuda whether they be digital asset businesses per se or companies that are going to use Bermuda platform to launch other digital asset and what does it take to actually set up one of these businesses in Bermuda what it takes well the first thing is that you have to be able read a company you can get in touch with any one of our wonderful service providers they'll take you who the incorporation process you can even if you're in New York you can fly down in the morning you can meet with all of our regulators our FinTech team and our service providers have dinner outside next to the water and be back at Midtown before lunchtime the next day that's how quick and easy it is to get to review to and to transact those type of businesses but once you have a company established you can then make an application to review to monitor Authority for either a digital asset business license or to issue a digital asset and the turnaround time for feedback that you get off of your initial application once it's completed 72 hours that's it's hard to turnaround time for feedback now the issue the license will take a little bit longer but if you have all of your as we say for get a ducks in a row then you can get through it very quickly so do you actually have to have a physical headquarters in Bermuda or is it sort of like the Cayman Islands remove you have a bank account but you live in New York something like that for digital asset businesses you must have a physical presence in Bermuda so we regulate ur wants to be able to talk to you and see you and reach out also the companies that are being set up under a digital asset business act actually have physical presence and employees in the jurisdiction that's what we want Bermuda has always been a place that prides itself in physical presence they're the large financial services industry they're where they are required to actually be Institue in the country and our digital asset business is as they grow will be no difference and the hope of course is that they provide opportunities to review teams who are looking for employment and work and we've put a lot of money into making sure that we can train persons who are in Bermuda so they can fill these jobs we've seen some cryptocurrency companies move around trying to find jurisdictions that's them with their regulations finance for example the biggest cryptocurrency exchange in the world they've moved around they've been in China than Singapore Malta are you actively pursuing names like that are you trying to get finance and other sorts of companies like this to Bermuda and if so how are you wooing them okay well one of those 74 companies is actually financed from you to limited by an instead come to Rita in April of last year we signed a Memorandum of Understanding to set up compliance operations in Bermuda but one of the places of where they were challenged was banking and I think that's been a challenge in a number of jurisdictions so recognizing that challenge the government set about solving that problem so what we did we amended our our banking legislation which created a special category of banks that can serve companies inside of the FinTech space there are applications now there before the VMA to set up those type of banks in addition we've signed agreements publicly with a signature bank and other banks that will bank some of the companies that are in Bermuda and companies such as finance through their lawyers have been put in touch with those companies so that we can move that process forward the thing is that it's an embryonic industry and the one thing in which you want that will make it successful is you have the complete ecosystem so we're looking at doing the ecosystem banking now where we know that we have solutions and also there are companies and now they're looking to come in to review de to provide insurance and custody services in order to have secure custody you need to make sure that you can also ensure those risks and we have persons that are going to start providing insurance for digital assets which is very very exciting are you looking at ways that this technology that cryptocurrencies and block chains could potentially update the infrastructure of the government's technology absolutely absolutely I think there's a lot of things that can be done in that space one of the things of which we had signed was an agreement um I think it was with bitfury to do a land titling system we're looking at of cooperating with other companies um in in doing similar things regarding the government and the government services but I think what we like for Bermuda to be known as is that place where we have accelerators in many different countries there are hubs in many different countries but Bermuda being 20 square miles 65,000 people one of the most advanced economies in the world one of the few jurisdictions on the planet that could deliver fiber directly to every single home were very tied in technology wise and we want Bermuda to be that place where companies can actually demonstrate how their products or services can work on a countrywide level and then scale those the rest of the world that's how we're positioning ourselves what about a blockchain voting system for example or a cryptocurrency like a Fed coin or something that was you know a state I know that state issued or Fiat backed cryptocurrency absolutely there are some of the things in which we're looking at there is through our financial policy council they're examining what a central are essentially Bank digital currency is that that's what they call it looks like there's been some different discussions about how we go about doing that but I think there may be another way about going at it in so far it's not necessary from the central bank whether the government can actually issue credit so for instance right now we used two credits for social assistance right now and so you can do that on it in lis an app as opposed to the legacy system regarding voting this is a company of which we have a member of an understanding which is Medici Ventures of course dr. Patrick Byrne overstock.com with Medici ventures we have an MoU with them and we're actually exploring using one of the companies inside of Medici ventures to do some voting applications locally in Bermuda as well some of the hesitation that other countries have had with regard to approving these cryptocurrency or blockchain companies is just a concern over scams and potential illegal activity you just had the quadriga blow up in Canada where people are missing millions of dollars how are you thinking about that or you know trying to prevent it if quad regal was licensed under the purview to monitor authority what has happened would not have been able to happen because we have rules regarding the custody of master keys and making sure that they're not held by a particular individual so they're you don't have that particular situation which took place but the approach of which we've taken in Bermuda is that we have a very high bar so not every country can our company can get past our our Bermuda monitor authority and we only want the companies that are going to operate for our jurisdictions that standards are high enough to pass that very stringent tests because like other countries we recognize that any reputational damage from scams or otherwise have an impact on our traditional financial services sector such as insurance and asset management and we don't want that I would call it cross-contamination the regulations you have in place regarding master keys that would have prevented something like wonder you get from happening tell us a little bit more about how that works and you also pass some like I co legislation is that related absolutely well as the suite of legislation which we have first it's a digital asset issuances icos regular utility tokens or security token offerings our legislation is broad enough so that any type of digital asset issuance can fit underneath those those parameters then we have the digital asset business act that is for exchanges and custom providers and inside of those regulations there that is where it basically states what you have to do with the master key is how those things have to be handled and making sure that they cannot be lost or if they're lost there's a way for that recovery to happen also specifically and when we say our regulations are deep because we have to protect against money laundering because we have to protect against illicit activities the remuda monitor authority actually has permission to have access to the exchanges to block transactions if it was deemed necessary so as I said there's a very stringent set of rules and regulations but our rules and regulations have also been examined and are in line with the global standards that have been promulgated from the financial action task force and we actually are working I was at the OECD last in last September when they were doing about what global blockchain regulation will be and Bermudas playing a role in showing the example of regulations in which we have and making sure that we keep it at the highest standard and we and we're happy that lots of countries have actually used our model and adopting some of the regulations and laws of which we put in place for their particular industries that's not something that's a bad thing I think that's a good thing because this is going to be the future of financial services what do you think about the way the United States has approached regulation in the cryptocurrency industry whether that be from the Securities and Exchange Commission or the CFTC or or whatever else yeah and I think that's part of the challenge and I think that's the thing that's one of the calling cards form you know when the calling cards is you have one regulator to deal with you have one government to deal with there's not multiple levels and stay federal and this regulator and this regulator all the rest so from the United States perspective we don't pay that much attention so I would I would like to answer that question in a I would say an educated way but from the perspective where Bermuda is we know that that's not what we want to be and so for companies that are looking for stability where companies that are looking for a clear regulatory landscape which says if you set up these the rules that's what you can do that's I think what we're trying to provide well let meantime it sounds like a lot of entrepreneurs out there should be thinking about at least a visit to Bermuda absolutely premier Burt thank you so much for being here no problem thank you very much I enjoy my time I'm Jen Viet sir and I'm Robert Hackett come to fortune.com for more balancing the ledger we'll see you next time [Music]