Bermuda’s first digital bank may already be on the cards, with the Government welcoming the first formal bid.

The application submitted to the Bermuda Monetary Authority proposes a bank serving digital-asset businesses and institutions globally from Bermuda.

It is for a combined full-service bank and digital-asset licence for custody of digital assets and issuance of stablecoins directly from the bank.

A statement from the applicant, Jewel, said that the planned services address the core banking and settlement needs of global digital-asset companies including core banking, digital-asset custody, crypto-collateralised lending and traditional fiat and stablecoin payments.

As a fully-licensed Bermudian bank, Jewel would service global firms (B2B) as well as provide retail services within Bermuda as required under the Banks and Deposit Companies Act.

A website outlining the intention for the proposals has been placed online.

Chance Barnett, chairman and joint founder of Jewel, says that the proposed digital-asset-friendly Bermudian bank aims to act as a bridge between traditional currencies, such as US dollars, and digital assets.

This was his position taken in January, when The Royal Gazette disclosed Jewel’s intention to make the BMA application.

David Burt, the Premier, is an advocate for Bermuda’s own digital bank.

Jewel quotes the Premier as saying: “Bermuda is excited to continue to grow and expand its financial services sector, and the introduction of Jewel as Bermuda’s first dedicated digital-asset bank can provide the critical infrastructure to further drive the growth of Bermuda’s digital asset economy and meet the growing demand for digital-asset banking services globally and within Bermuda.

“We look forward to having Jewel as part of the evolving Bermudian digital-asset ecosystem, and I congratulate the Jewel team on reaching this milestone.”

Meanwhile Coindesk is reporting that a CEO has already been lined up to start work on Friday for the new proposed bank, which may begin operating, if approved, early in the new year.

Jewel said that its leadership team brings a depth of banking and digital-asset-sector experience from companies such as Visa, IBM, Silicon Valley Bank, R3, Wells Fargo and Square 1 Bank.

It added: “Jewel leadership chose Bermuda as the optimal non-US jurisdiction for its global digital-asset bank, due to Bermuda’s existing DABA digital assets framework under a single regulatory body (unlike the US); the sophistication of the Bermuda Monetary Authority regulator; Bermuda’s top global standing in compliance and AML as evidenced by its recent FATF rating; Bermuda's prior commitment to accept single US dollar fiat-backed stablecoins like USDC for payment of taxes and government services; Bermuda’s history as a leading global financial services centre in insurance and reinsurance; and support and innovation from the top levels of leadership in Bermuda, including its driving force, Premier David Burt.“

Jewel said that the digital-asset trading industry has continued to experience tremendous growth, with trading volumes reaching $2.1 trillion on spot exchanges alone in May, with an estimated 90 per cent of this volume taking place on exchanges outside the US.

Yet with this larger global market, it said, non-US digital-asset companies are underserved with respect to banking, and stable banking represents a key pain point for them.

Jewel’s focus is serving the needs of the companies that make up this larger global digital-asset market with the missing banking and settlement infrastructure they need to de-risk their businesses and drive their growth.

The statement adds: “A key focus of Jewel’s banking infrastructure is to fill the gap in the global non-US digital-asset trading market for modern digital-asset banking and DLT-based settlement that underlies the large global trading volumes.

“To deliver on this, Jewel’s proposed product set includes Jewel as a bank issuer of US dollars and other single fiat currency stablecoins, enabling Jewel clients to settle and manage liquidity with trading partners within the bank in real time.

“Today, no significant blockchain-based settlement solutions like this exist for non-US banking clients, in light of the estimated 90 per cent of global digital-asset trading volumes taking place outside the US.