A word of warning about our incessant crypto drive
There is an old hymn, Count Your Blessings, which includes the line “name them one by one”. I for one can see the perceived risk that cryptocurrency may implicate, but I would be foolhardy or outright bigoted to believe or proclaim there is no benefit and that the Government has lost its way.
I don’t know the 2018 legislation well enough to say what’s in it, but if Bermuda becomes the jurisdiction for enrolment to what inevitably will become a global business, and if this becomes the jurisdiction where companies become incorporated, then there is a huge benefit that will accrue as a result.
However, just as I did in a live interview with Sir John Swan in the early Eighties, when international business was starting to rear its head, I made the comment that while it may be good for the country, when you look at who is likely to prosper, we need to take measures to spread the benefits.
In this case, cryptocurrency and blockchain technology are even more specialised than the international business of yesteryear. Law firms will be an obvious beneficiary, which is good. The spin-off means employment for lawyers and administrators, which secures rents for buildings and, naturally, tax dollars that will hit the government coffers.
Timing is everything and the issue of competitive response will not take long before other jurisdictions tap into the race and whatever niche developed will become flooded with an abundance of choices. We could gain for a brief period some exclusivity, but even so like the weakness in our existing business model with international business, which is solely dependent on rents and employment, will have to shift to some form of transactional fees to have a real and continuous benefit beyond the grave.
All business has a life cycle; the opportunity lies in extracting the benefit while it lasts.
The important thing to understand is this benefit is primarily a trickle-down and, as mentioned earlier, any benefit is good whether it bubbles up or trickles down — but it is not a “physical economy”.
I like the old slogan for how we made money: “We earned it”. Parasitical economies that suck on real business have viability but can be transient.
Yes, Bermuda needs to keep pace in the world of technology, but we also need an economic base that does not shift at the stroke of a pen or click of the mouse. International business softened its economic impact because it required fewer hands on deck as technology grew. The result was a downturn in the economy. Part of the problem was not technology but outsourcing, which can happen very quickly.
The focus needs to be on the kinds of physical economies that employ bodies and require bodies to perform a task. We do not have natural resources, but we have the location. That is why I always turn to our strength, which is our maritime location. This, in my view, will be our saving grace.
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