HAMILTON, Bermuda, Mar 1, CMC – Premier David Burt has named the New York-based Signature Bank as the financial entity that will service fintech (financial technology) companies that have been incorporated on the island.
“Signature Bank’s willingness to consider Bermuda-licensed businesses for banking services is a significant vote of confidence in and endorsement of Bermuda’s efforts to create a leading high standard regulatory regime for fintech business,” Burt said in a statement.
“As a result of our business development and promotional efforts, 66 fintech companies have been incorporated in Bermuda. However, the absence of banking services for fintech companies has been an impediment to those companies who are looking to establish a physical presence in Bermuda,” he added.
The government said Signature Bank will aim to fill a void left by local banks — including the largest two, HSBC and Butterfield — which have shied away from the fledgling sector that Burt is relying on to diversify the island’s struggling economy whose main planks have long been international business and tourism.
Signature Bank will start accepting banking applications immediately from Bermuda-licensed companies, although it was not immediately clear if the bank proposes to have a physical presence on the island.
To tackle the problem, the government amended the Banks and Deposit Companies Act 1999 in July last year to create a new restricted banking licence.
The government says it intends to spur growth from new fintech entrants attracted by the island’s regulatory framework for digital asset business and initial coin offerings, created by legislation passed last year.
Signature Bank, which was founded in 2001, went public in 2004 and trades on the Nasdaq Stock Exchange. It has a market capitalisation of about US$7.4 billion.
Signature Bank “has agreed to provide a full range of banking services to companies that meet Bermuda and Signature Bank standards”, a government press release said.
Signature was the first bank to launch a New York regulator-approved, blockchain-based platform for managing money transfers between clients. The platform, known as Signet, was launched before JPMorgan announced its own, similar JPM Coin two weeks ago.
“Since launching at the start of the year, our blockchain based Signet system has on-boarded multiple clients who are using it to send each other millions of dollars, 24 hours a day, seven days a week,” said Joseph DePaolo, Signature’s chief executive officer.
“Currently, we are seeing trades in the millions some days and tens of millions other days, with the number of Signet clients in the triple digits.
“Signature Bank is one of the few banks in the US that will provide deposit accounts and corporate debit cards to cryptocurrency start-ups, but we are seeing non-crypto businesses signing up as well.”
The vice-chairman of the bank, John Tamberlane, said “we are impressed with the progress Bermuda has made to date on a regulatory front, and look forward to working with the government of Bermuda to help promote growth and expansion of the fintech and digital asset industry in that country”.
Burt said that Bermuda is setting itself apart by providing regulatory certainty combined with a world-renowned reputation for transparency and the highest standards of global compliance.
“Signature Bank’s endorsement showcases how Bermuda is competitively placed to advance the pace of the digitisation of global commerce as modern technology is applied to the highly regulated world of finance.”