While many countries, such as Ecuador and Algeria, have made the business of cryptocurrencies illegal within their borders, Bermuda appears to be moving in the opposite direction. The North Atlantic Island has been home to a fruitful offshore banking industry for a number of years now, and it appears that they are more than willing to benefit from the cryptocurrency boom. Legislation has recently been tabled by the Bermuda government that would make it specifically legal for cryptocurrency operators to set up shop on the island.
This legislation, currently called the Virtual Currency Business Act, was introduced last week by Wayne Caines, the Minister of National Security in Bermuda. At an information session, Caines told citizens that the Bermuda government already had at least twenty different operators interested in moving their business to the island and that representatives would be heading to London in order to meet with prospective clients.
The Importance of Cryptocurrency Regulation in Bermuda
Making a cryptocurrency operation specifically legal within a country is more important than most people probably realize. While most countries are still scrambling to come up with the right kinds of rules and laws to impose upon the new digital world of money, operators working within these countries are left exposed to new legislation that could close their shop at any time. If you’re looking for a bit of reference here, we need to look no further than Costa Rica about a decade ago. They were a country that had no specific laws against online gambling at the time, so web-based casinos set up shop there to avoid the legal bear trap that is the United States. One day, however, the Costa Rican government decided to allow United States law enforcement officials to raid the online gambling operations that conducted business inside their borders, and the rest is history. Other nations, such as Antigua, made specific laws that legitimized the online gaming business, and the operations there were not subject to the same kind of invasive enforcement.
Bermuda is following in the footsteps of countries like Antigua, creating regulation and welcoming cryptocurrency operators. It may seem that government regulation and digital currencies don’t go together all that well, but when brick and mortar businesses develop, utilize, and mine digital currencies, protection through regulation might just be a necessary type of evil.
Details of the Virtual Currency Business Act
It might be easy to dismiss this legislation as a quick reaction by a country looking to cash in on something that is suddenly popular, but the Bermuda Government has done much more than their fair share of due diligence. As proof of that, you only need to take a look at the 150 page document that Bermuda produced in preparation for this move. Follow this link to view their Consultation Paper on Virtual Currency.
A Different Move by a Different Country
More than just Bermuda is trying to cash in on the digital currency boom, but other countries aren’t going in the same direction as they are. Another country that’s using digital currencies in a different fashion is Venezuela. Instead of regulating in a manner that allows outside operators to come in and set up shop inside their borders, they’ve gone ahead and developed their own oil-backed cryptocurrency, the Petro. This is designed to replace the current national currency and allow the country to do business more easily without being forced to use the US dollar.