Name: Balancing the Ledger: How Premier David Burt Turned Bermuda into the 'Silicon Valley of the Atlantic'
Uploaded: 2019-03-25
Duration: 11 min 56 s
Description: David Burt is the youngest Premier in the history of Bermuda.

[ MUSIC ] Welcome to Balancing the Ledger where tech and finance intersect. I'm Jen Wieczner. 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, Premier Burt. 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. I'm leader of the Progressive Labor Party. We won election in July of 2017. And we won an election based on the mandate to build a better and fair Bermuda. That sounds like something a lot of politicians say. But our job is to make sure that we try 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. You've made FinTech a big priority for Bermuda. Tell us a little bit about the strategy behind that, how that idea came about. Mm- hm. Well I was in Bermuda. I was, not too long after I was elected and there was a company 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 service industry, this could represent the future financial services, and you should look to see whether or not you can put regulations in place so track. More of these type of companies here, and so we took the advice. A few more people had said certain things and in November 2017 we launched our task force, and then in 2018 we started putting legislation into place. And I think we're 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 providers, 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, to date, we have 74 FinTech related companies that are now incorporated in Bermuda. So we have a company, Ohlala Who was granted the rights to issue this asset. Also, a company, Tribal 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 incredible how they're able to. 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 their digital asset. What does it take to actually set up one of these businesses in Bermuda? What is takes? Well the first thing is that you have to be a Bermuda company. You can get in touch with any one of our wonderful service providers. They'll take you through the incorporation process. You can even, if you're in New York, you can fly down in the morning. We can meet with our regulators, our Fintech team and our service providers, have dinner outside next to the water and be back in town before lunch the next day. That's how quick and easy it is to get to Bermuda and to transact those types of businesses. But once you have a company established, you can then make an application to Bermuda Monetary Authority for either a digital asset business license Or to issue digital asset and the turnaround time for feedback that you get off of your initial application once it's completed in 72 hours. That's the target turnaround time for feedback. Now the issue of the license will take a little bit longer But if you have all of your, as we say, Bermuda ducks in a row then you can get through it really quickly. So do you actually have to have a physical headquarters in bermuda or is it sort of like the caymen islands where you have a bank account but you live in new york something like that. For digital asset businesses you must have a physical presense in bermuda. So the regulator wants to be able to talk to you and see you and reach out. So the companies that are being set up. Under Official Assets Business Act actually have physical presence and employees in the jurisdiction. That's what we want. Bermuda has always has always been a place that prides itself in physical presence. We have a large financial services industry here where they are required to actually be in situ. In the country in our digital asset business is as they grow would be no different. And the hope of course is that they provide opportunities to [ INAUDIBLE ] 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 crypto currency companies move around, trying to find jurisdictions that suit them with their regulations. Binance, for example, the biggest crypto currency exchange in the world, they've moved around, they've been in China and Singapore, Malta. Are you actively pursuing names like that? Are you trying to get Binance and other sorts of companies like this to Bermuda and if so, how are you Moving them. Okay. Well, one of those 74 companies is actually Binance from [ UNKNOWN ]. Binance did contributed in April of last year. We signed a memorandum of understanding to setup compliance operations in Bermuda. But one of the The places 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 banking legislation. Which created a special category of banks that can serve companies inside of the Fintex base. Their applications down there before the BMA to set up those type of banks. In addition we've signed on agreements publicly with Signature bank and other banks that will bank some of the companies that are in Bermuda and companies such as Binance 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 ecosystem in banking now where we know that we have solutions, and also there are companies now that are looking to come into Bermuda to revive insurance and custody services in order to have secure custody, you need to make sure 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 blockchains could potentially update the infrastructure Of the government's technology. Absolutely, absolutely I think there is a lot of things that can be done at that space. One of the things of which we had signed was an agreement, I think it was with [ UNKNOWN ] to do a land titling system. We're looking at corporating with other companies and in doing similar things regarding the government and the government services. But I think what we like for Bermuda is known as is is that place we have [ UNKNOWN ] so many different [ UNKNOWN ] Countries. There are [ INAUDIBLE ] of 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 of the planet that could fiber directly to every single home. We're 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 country [ UNKNOWN ] level and then scale those to 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 FedCoin or something that was a state issued or [ UNKNOWN ] cryptocurrency. Absolutley. Here's some of the things which we We're looking at, there is through our financial policy council, they're examining what essentially bank digital currency is. 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 in so far as not necessarily from the central bank, but the government can actually issue credit. So for instance, right now we issue credit for social assistance right now. And so you can do that on a, in the app as opposed to a legacy system. regarding voting, this is a company at which we have a memorandum of understanding with which is Menechi Ventures of course. Dr. Patrick Burn at Overstock. com with Medechi Ventures. We have an MOU with them and we're actually exploring using one of the companies inside Menechi 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 crypto currency 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 abut that or trying to prevent it. If Quadriga was licenced under the Bermuda Moniter Authority What has happened would not have been able to happen because we have rules regarding regarding the custody of master keys and making sure that they are not held by a particular individual so that you don't have that particular situation which took place. But the approach which we've taken, Bermuda, is that we have a very high bar. So not every company can get past our Bermuda monitor authority. And we only want the companies that are going to operate for a jurisdiction that standards are high enough to pass that very stringent test. Because, like other countries, we recognize that any reputational damage from scams or otherwise can have. The impact on our traditional financial services sector such as insurance and asset management and we dont want that, I will call a cross contamination. These regulations you have in place are gonna have master keys which would have prevented something like Quadriga from happening? Tell us a little bit more about how that works. I know you also passed some ICO legislation, is that related? Absolutely, well, it's the suite of legislation which we have. First is the 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 parameters. Then we have the digital access business act that is for exchanges and cost providers and inside of those regulations there. That is where it basically states what you have to do with the master keys. How those things have to be handled. In making sure that they can not be lost. Or if they're lost there's a way for that recovery to happen. Also, specifically, and when we say our regulation are very deep, we have to protect against money laundering. Because we have to protect against illicit activities. The Bermuda Monetary 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 block chain regulation would be and Bermuda playing a role in showing the example of the regulations which we have and making sure we keep it at the highest standard. And we are happy that lots of countries have actually used our model and adopting some of the regulations and laws in which we've put in place. For their particular industries. That's not something that's a bad thing they're having. That's a good thing, cuz 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. Range Commission or the CFTC or what have you. Or whoevery else. Yeah [ LAUGH ] [ LAUGH ] And I think that's why the challenge, and I think that's the thing, that's one of the calling cards for Amuta. One of the calling cards is you have one regulator to deal with, you have one government to deal with, There is not multiple levels, and state and federal and this regulator and this regulator, and all the rest. So from the United States perspective, we don't pay that much attention. So I would like to answer that question in a, I would say an educated way. But from On the perspective of 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 are looking for a clear regulatory landscape which says if you set up these are the rules this is what you can do. That's what I think we are trying to provide. Well, in the meantime it sounds like a lot of entreprenauers should be thinking about at least a visit to Bermuda. Absolutely. Premier Burt thank you so much for being here. No problem. Thank you so much I enjoyed my time. [ BLANK_AUDIO ] I'm [ UNKNOWN ] and I'm Robert [ UNKNOWN ] Come to fortune. com for more balancing the ledger. We'll see you next time. [ MUSIC ]

Balancing the Ledger: How Premier David Burt Turned Bermuda into the 'Silicon Valley of the Atlantic'

Tech

David Burt is the youngest Premier in the history of Bermuda.