Here comes good news for cryptocurrency industry – the crypto start-ups in Bermuda can now open bank accounts in New York. The Government of Bermuda has partnered with New York-based Signature Bank. According to the deal, FinTech companies of island nation will have access to US banking services.
The NY based commercial lender will provide a full range of banking services to companies that meet its Bermuda’s and Signature Bank standards. And, Bermuda-licensed companies have the upper hand as they can immediately start filing banking applications at Signature Bank.
A decade back when bitcoin was launched, not many mainstream banking services agreed to partner with crypto companies. The principal reason behind this love-hate relationship between banks and crypto start-ups was the unregulated and confusing legal status of the crypto industry. This pushed licensed crypto companies with strong financial support to secure a bank account for themselves.
Bermuda has restructured its regulatory frameworks to harbor crypto, the blockchain, and FinTech businesses. Back in July 2018, the government made changes in the Banks and Deposit Companies Act 1999 to build a new class of bank for blockchain and fintech businesses.
To back this move, Bermuda Premier David Burt said “banks are still averse to take on risks of dealing with FinTech start-ups, especially those dealings in digital assets like Bitcoin. Bermuda is performing its part in providing regulatory certainty to the crypto industry, which includes an amendment in Banks and Deposit Companies Act 1999 to validate crypto and FinTech businesses.
This change of law led to the licensing of 66 FinTech companies in Bermuda. According to Burt, this endorsement will display how Bermuda is ambitiously placed to drive the pace of the digitization of global commerce as modern technology is applied to the highly regulated world of finance.
The approval of Bermuda’s crypto project by Signature Bank was because of its user-friendly crypto technology. Signature Bank is set to offer crypto start-ups of Bermuda with every banking service (including deposit accounts and corporate debit cards) that a traditional company gets.
Signature Bank is popularly known for its Ethereum-based payment platform Signet, which uses a stable coin for settling transactions. Moreover, it is the first commercial bank to start a stable coin-backed payment project – and that too before when JP Morgan launched its JPM Coin in February 2019. It was in December 2018, when the Department of Financial Services of New York legalized a blockchain-based digital platform by Signature Bank called Signet. During that time, CEO Joseph DePaolo commented, “our blockchain based Signet system has on-boarded multiple clients who can pay each other millions of dollars, 24 hours a day, seven days a week. We are witnessing trades in the millions on some days and tens of millions on other days, with the number of Signet clients in the triple digits.”
On this occasion, Vice-Chairman John Tamberlane of Signature Bank said, “We are fascinated with the development made by Bermuda on a regulatory front, and look forward to working with the Government of Bermuda to boost the growth and expansion of the FinTech and digital asset industry in that country.”