New licenses issued for digital banking – The Royal Gazette

Updated: June 07, 2022 7:19 PM

Bermuda’s long-proposed digital bank has become a reality with a full banking license that will allow it to provide basic banking services, as well as a license under the Digital Asset Business Act.

jewelry bank will begin operations from Victoria Street in Hamilton as early as September, pending remaining regulatory approvals.

But the retail focus won’t come immediately as the bank sets itself up with core functions aimed at the digital asset economy.

A Bermuda digital bank has been a key part of the fintech strategy spearheaded by Prime Minister David Burt and his administration.

The bank’s initial squad will be less than 40, but will grow to around 100 in a short time, with training and opportunities for Bermudians.

Chance Barnett, Jewel’s founder, chairman and chief strategy officer, said he was very excited about the new venture, but his banking proposal had actually been on the back burner for more than two years.

He was quick to acknowledge Mr. Burt’s support and long-term vision as well as the experience and forward-thinking of the financial services regulator, the Bermuda Monetary Authority, which received the application for license eight months ago.

He said the bank would play a major role in accelerating Bermuda’s long-term digital transformation, not only by providing services to the island’s emerging market, but by helping to promote growth.

Jewel Bank will be the first digital asset bank in Bermuda to provide banking and payments infrastructure for the digital asset industry.

The sensational news is expected to reverberate internationally throughout the digital asset sector as the next step in the evolution of the industry.

The chairman said the world’s largest digital exchanges, institutional investors, market makers and ancillary trading firms have specialized needs that traditional banks are not meeting due to legacy technology, outdated business practices and a lack of digital asset solutions.

Mr. Barnett agrees that there is still a lot of hype in the industry, but he sees ATM ledger technology bringing improvements to some banking transactions that are not only useful to institutions, but also at the retail level.

As well as serving the digital industry, including trade and other institutions in Bermuda and around the world, he said the new bank would also look at how it could provide nationwide services that would benefit residents of the Bermuda.

He said one of the exciting changes was that the bank would issue stablecoins, which would be important for the future of the bank and Bermuda.

Stablecoins are types of cryptocurrency but with much more stability.

Instead of the volatility seen in the value of many cryptocurrencies, the value of stablecoins is pegged to a fiat currency such as the US dollar or a commodity such as oil or gold.

They offer users the benefits of security and immediate payment processing that digital currencies offer, without the price volatility of traditional cryptocurrencies.

Mr Barnett said: “Today there are challenges and high fees with banking services and we are delighted to provide stablecoins as a way to make financial services a little more accessible, more transparent and at a lower cost. cost.

“Right now, if you’re a Bermuda merchant, credit card fees can cost you four to six percent of a transaction. While stablecoins do not have the same cost structure, so we can significantly reduce this cost.

Chance Barnett, Founder, President and Chief Strategy Officer, Jewel Bank (file photo)

Sylvia B. Polson