Some of the first things you are told about Bermuda when you arrive is to check out the beautiful pink-sand beaches and enjoy a bowl of the famous fish chowder and a "dark and stormy," a popular island drink.
These attractions seem natural for the subtropical island known for its tourism, but what you may not hear right away is that Bermuda, a British Overseas Territory with a self-governing parliament with less than 70,000 inhabitants, has become a global leader in "fintech" (technology primarily focused on the finance industry) and innovations involving blockchain.
So what is happening in Bermuda? Recently, as part of TechBeach, a conference that brings together the top innovators and thinkers to discuss the future of technology, Bermuda showcased why it has become the leader in attracting companies that are the forefront of tech innovation, and specifically the rapidly evolving and institutionalizing digital asset industry.
Over the past several years and with the leadership of its Premier, David Burt, the youngest Premier ever elected to this position, Bermuda's government agencies passed a string of new regulations aimed at creating an infrastructure and ecosystem for innovation and technology with a specific focus on the applications of blockchain. The legislation, which included leading-edge fintech regulations for digital assets, has put the island at the forefront of the blockchain revolution and made it a sought after destination for companies in the industry.
While I will not use this space to explain blockchain -- I am not certain I could do so effectively anyway -- it is worth knowing that blockchain has slowly been gaining acceptance as more applications and use cases are identified. While most people associate it with crytocurrencies, or bitcoin in particular, those in the industry are identifying interesting applications for finance, supply chain management, and marketing, just to name a very few.
Blockchain, however, or the theory upon which the technology is built, is still very young and wildly misunderstood by the vast majority of entrepreneurs and businesses, which has made it very difficult to regulate. Because of this, US regulators have been agonizingly slow to recognize blockchain as a legitimate technology, in particular when it comes to finance, and therefore have been equally as slow to create the necessary regulations to protect consumers. Instead, regulation lingers in a state of uncertainty as entrepreneurs in the space tepidly navigate the uncertain environment.
Bermuda, however, has powered ahead bravely to craft smart regulation meant to create an environment that encourages more applications of the technology while also creating a framework that maintains a high level of scrutiny to protect against fraud and misuse.
Additionally, Bermuda has created education and training programs and an innovation hub, essentially creating a "sandbox" in which entrepreneurs and the Bermuda regulators for financial services can work collaboratively to learn and evolve together as the technology and use-cases evolve.
So what can we take away from this? For starters, Bermuda is open for business, and for entrepreneurs that operate in this space or are seeking innovative ways to integrate blockchain in their business, it is well worth considering the island as a place to start, as it has the resources, firms and agencies necessary to maneuver the system.
The other lesson, I believe, is that the industry is ripe for brave, new leadership to steer the regulation and adoption of blockchain and exciting new fintech here in the US. Bermuda was poised to take the lead with very mature and well-regulated insurance and reinsurance industries, but the US is bigger -- many times bigger -- and we have the smart and brave resources to step up. The question remains if regulators have the courage.
In the end, I believe US legislators will see firsthand the potential disruptive economic impact this technology promises, and as other jurisdictions adopt and integrate regulations that foster these innovations, we will be hard pressed to ignore it.
In the meantime, as we wait for action, it is worth researching what is happening in Bermuda -- or better yet, visit and contemplate this topic on its pink-sand beaches as you enjoy your own dark-and-stormy.