In today’s rapidly evolving digital asset landscape, selecting the right jurisdiction for your business is paramount. Bermuda’s Digital Asset Ecosystem has positioned the island as a global leader in regulatory clarity, offering a sophisticated framework through its Digital Asset Business Act 2018 (DABA) that balances innovation with compliance. Y Partners in Bermuda has established themselves as trusted experts in navigating the DABA licensing process, providing businesses with the guidance needed to thrive in this dynamic and highly regulated space, including areas such as clearing and settlement.
The Evolution of Digital Asset Infrastructure in Bermuda
As noted by senior corporate counsel at BeesMont Law, Bourn Collier, digital asset clearing and settlement infrastructure is an area of increasing innovation. Currently, Bermudian DABA licensees self-clear, but in the derivatives space, key players are moving to implement tokenised collateral—with Circle Bermuda’s acquisition of Hashnote (which issues the USYC yield-bearing stablecoin)—as well as tokenised collateral management platforms announced by DTCC (DTCC AppChain) and Euroclear (on the Canton Network).
As the digital asset sector expands and becomes more sophisticated, there is likely to be a need (both for Bermuda businesses and from overseas) for more advanced infrastructure, including a settlement facility or protocol.
This insight highlights Bermuda’s forward-thinking approach to digital asset regulation. While the current licensing regime has served the market well, some in the jurisdiction are already preparing for the next evolution in digital asset operations.
A Member-Owned Clearing and Settlement Model
Bermuda is one of the world’s leading centres for risk capital and mitigation. Through its role as a leading reinsurance centre, Bermuda has deep expertise in risk transformation, which informs the approach of the Bermuda Monetary Authority (BMA), the island’s well-regarded financial regulator.
Currently, some of Bermuda’s regulatory experts are exploring innovative models for clearing and settlement infrastructure, specifically tailored for digital assets.
According to Bourn Collier’s research, the potential for centralised clearing using a model for a member-owned clearing and settlement facility for digital assets could revolutionize how transactions are processed and secured in the digital asset space.
Industry feedback is actively being sought from digital asset firms in Bermuda and overseas on such issues and the proposed regulatory model, demonstrating the collaborative approach that makes Bermuda an attractive jurisdiction.
Regulatory Evolution: Supporting Growth with Clarity
The BMA continues to show its commitment to creating an environment where digital asset businesses can flourish, having recently strengthened the rules for custody of digital assets by DABA licenceholders, among other efforts.
Bourn Collier notes that while DABA and the BMA can accommodate the launch of new digital asset settlement activities already, any significant launch of a clearing and settlement business would benefit from new regulatory guidance from the BMA – and potential legislative amendments.
This regulatory foresight is precisely why global businesses are turning to Bermuda for their digital asset operations. The jurisdiction doesn’t just offer rules; it offers regulatory evolution that keeps pace with industry developments.
Industry and Regulatory Collaboration
The Bermuda Monetary Authority (BMA) actively encourages open and ongoing engagement with the digital asset industry. This commitment is evident in initiatives such as its current Call for Proposals and efforts to gather insights on DeFi use cases, particularly those related to embedded supervision. These initiatives are designed to ensure that regulatory development remains aligned with technological innovation and real-world applications.
According to Bourn Collier, the BMA has communicated that any regulatory action in these areas will be shaped by both industry demand and prevailing business conditions. This responsive stance reflects a deliberate effort to remain both flexible and proactive—avoiding premature regulation while still laying the groundwork for future oversight.
This approach reflects a clear understanding of the evolving nature of traditional finance (TradFi) models, particularly in areas like clearing and settlement and netting risk. It demonstrates a regulatory philosophy that prioritizes thoughtful, risk-based oversight while continuing to foster innovation and sustainable growth within Bermuda’s digital asset ecosystem.
