The Bermuda Monetary Authority will seek to improve administration of the 2018 Digital Asset Business Act by proposing changes to strengthen the legislative and regulatory framework.

The BMA has rolled out a raft of would-be changes and given those in the sector and other interested persons two months to share their views on the proposals and the proposed legislative amendments.

Proposed changes to the Act and the Digital Asset Business (Prudential Standards) (Annual Return) Rules 2018 have been provided as part of a consultation paper by the authority.

The paper outlines: “In recent years, the local and international digital asset business sector has experienced rapid growth and evolution, as is evident through the development of new and innovative solutions and business models.

“As such, Bermuda’s regulatory and supervisory framework must keep pace with the dynamic nature of this market.

The authority said that proposed updates aim to ensure that Bermuda's legislative and regulatory framework for digital assets remains pertinent and effective in this rapidly changing business environment.

Proposals above aim to clarify the legislation, enhance the authority's administrative and enforcement powers and mitigate against noncompliance.

The paper says the BMA is committed to responsible innovation while ensuring that legislation in the digital-asset business market continues to be fit for purpose.

It states: “As a financial services sector regulator, the authority’s objectives are to protect customers and maintain market confidence.

“The proposed amendments aim to effectively communicate the expectations regarding prudent operational measures while ensuring the authority has sufficient administrative and enforcement powers to enhance the DAB regulatory framework.”

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2024-10-08-08-53-25-Consultation-Paper---Proposed-Amendments-to-the-Digital-Asset-Business-Act-2018-and-the-Digital-Asset-Business-Prudential-S.pdf

Comments may be sent to the Bermuda Monetary Authority digitally no later than December 9, via the survey link www.surveymonkey.com/r/82SZHKM

The authority publishes formal consultation papers to industry as part of the development process for ongoing enhancements to Bermuda’s regulatory framework. Such consultation facilitates input from the market in parallel to ensuring that any proposed regulatory changes will be effective and consistent with international standards.