Cryptocurrency startups in Bermuda can now open bank accounts in New York.
In a press release published Thursday, the Government of Bermuda announced that it is partnering with New York-based Signature Bank. Per the release, the deal will allow the island nation’s FinTech companies to access US banking services.
#BREAKING: #SignatureBank will bank Bermuda’s #FinTech firms. The NY based commercial lender will provide a full range of banking services to companies that meet its + Bermuda’s standards. #Bermuda – licensed firms can apply immediately. #ICO #Crypto #cryptocurrencies
— Toni Waterman (@ToniWaterman_) February 28, 2019
Bermuda-licensed companies can start filing banking applications at Signature Bank, the government notified.
Efforts to Legitimize Cryptos before Banks
The announcement follows years of banks’ love-hate relationship with crypto startups. Following the inception of bitcoin a decade back, not many mainstream banking services agreed to partner with crypto companies. Many a time, it was due to the largely unregulated and confusing legal status of the crypto industry. At the same time, licensed crypto companies with strong backers managed to secure a bank account for themselves.
Nevertheless, Bermuda Premier David Burt acknowledged that banks were still reluctant to take on risks of dealing with young fintech startups, especially those which supported dealings in digital assets like Bitcoin. The lawmaker asserted that Bermuda was doing its bit in providing regulatory certainty to the crypto industry, which includes an amendment in Banks and Deposit Companies Act 1999 to authenticate crypto and fintech businesses.
The change of law led to the licensing of 66 FinTech companies in Bermuda. According to Burt, it was a successful attempt that provided regulatory certainty to Signature Bank.
“Signature Bank’s endorsement showcases how Bermuda is competitively placed to advance the pace of the digitization of global commerce as modern technology is applied to the highly regulated world of finance.”
A Crypto Lover Bank
Signature Bank’s approval of Bermuda’s crypto industry also came in the wake of its friendly nature with cryptocurrency technology. The bank is best known for launching Signet, an Ethereum-based payment platform which uses a stablecoin for settling transactions. Interestingly, Signature Bank was the first commercial bank to have started a stablecoin-backed payment project – even before JP Morgan launched its much-touted JPM Coin in February 2019.
“Since launching at the start of the year, our blockchain based Signet system has on-boarded multiple clients who are using it to send each other millions of dollars, 24 hours a day, seven days a week,” stated Joseph J. DePaolo, President and CEO at Signature Bank. “Currently, we are seeing trades in the millions some days and tens of millions other days, with the number of Signet clients in the triple digits.”
Simultaneously, DePaolo asserted that they would provide Bermuda crypto startups with every banking service that a traditional company gets. That will include deposit accounts and corporate debit cards.