The Bermuda Monetary Authority (BMA) has received the island’s first formal bid to set up a full service digital bank.

A statement on the application submitted by Jewel, said: “Jewel, a proposed bank serving digital asset businesses and institutions globally from Bermuda, has submitted its formal bank application with the Bermuda Monetary Authority, in a combined full-service bank and digital asset license application [to custody digital assets and issue stablecoins directly from the bank.

“Jewel’s planned services address the core banking and settlement needs of global digital asset firms including core banking, digital asset custody, crypto-collateralized lending, and traditional fiat and stablecoin payments. As a full license Bermudian bank, Jewel will service both global firms (B2B), as well as provide retail services within Bermuda as required under Bermuda’s Banks and Deposit Companies Act.

“The digital asset trading industry has continued to experience tremendous growth, with trading volumes reaching $2.1 Trillion on spot exchanges alone in May 2021, with an estimated 90 percent of this volume taking place on exchanges outside of the US.

“Yet with this larger global market, non-US digital asset firms 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 firms 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.

“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 USD 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% of global digital asset trading volumes taking place outside the US.

“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 USD fiat-backed stablecoins like USDC for payment of taxes and government services, Bermuda’s history as a leading global financial services center in insurance and reinsurance, and support and innovation from the top levels of leadership in Bermuda including its driving force Premier David Burt.”

The statement also quotes the Premier, who said: “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.”