Jewel seeks digital-asset bank licence
One of the bottlenecks that has stymied the growth of fintech companies and others involved in digital assets could soon be remedied by Jewel, which is in the process of applying for its full bank licence with the Bermuda Monetary Authority.
Jewel announced today that Anchorage, a Visa-backed crypto-native digital-asset platform for institutions, will provide it with secure digital-asset custody, with access to related lending products collateralised by digital assets held in custody.
Chance Barnett is the chairman and joint founder of Jewel, the proposed digital-asset-friendly Bermudian bank that aims to serve digital asset businesses and institutions in Bermuda and globally. It intends to act as a bridge between traditional currencies, such as US dollars, and digital assets.
Mr Barnett has been involved in building technology companies for almost 30 years, and helped set up Crowdfunder in the US — a high-level equity crowdfunding site.
He said: “The digital-asset trading and crypto-collateralised loan markets are growing at a tremendous rate, and leading digital-asset firms and institutions in the US, Bermuda, and globally are in search of a trusted digital asset banking and infrastructure partner like Jewel's proposed bank.”
Mr Barnett said Bermuda has long been a leader in institutional finance as a global centre for insurance and reinsurance, and was a sophisticated financial jurisdiction with a strong reputation in anti-money laundering legislation.
He added: “With Bermuda's DABA [Digital Assets Business Act] legislation, and with Jewel's pending licence to service the digital-asset industry, Bermuda and Jewel are poised for tremendous growth from both domestic and global digital asset clients over the coming years.
“Our relationship with Anchorage enables us to serve our clients with the rigorous security and product standards needed for bank level safety, service and compliance.”
In April 2019, Mr Barnett staged the invite-only B3 Future Banking Summit in Bermuda. The event focused on banking, blockchain and Bermuda, and featured speakers from the likes of IBM, and former executives of World Savings Bank and the London Stock Exchange. Curtis Dickinson, the finance minister, and Sir John Swan, the former premier, also attended the summit.
Mr Barnett was also a speaker at the Bermuda Tech Summit in October.
The Jewel and Anchorage business relationship aims at key opportunities to provide globally accessible banking and custody infrastructure for the digital assets industry.
One of those opportunities is increased access to banking and financial services, with Jewel serving as a bridge across both traditional fiat currencies and digital assets, “while minimising the need for movement of those digital assets, reducing the risks of theft or fraud”.
The initiative also aims to capitalise on the increasing demand within the institutional crypto-collateralised lending market, which Jewel said is today estimated at $4.7 billion in total loans.
It is also aimed at providing “value-added digital-asset banking services that surround digital-asset custody” by servicing and settlement of digital-asset-related transactions, with Jewel the banking bridge between digital assets and traditional fiat currency held in bank accounts.
In a statement, Jewel noted an interpretive letter published by the US federal bank regulator, the Office of the Comptroller of the Currency, which clarified US national banks' authority to provide digital-asset custody services for their customers.
Jewel said it is positioned to be one of the first and only digital-asset banks within Bermuda, pending licence approval, and its “anticipated digital asset bank and platform, with digital asset custody powered by Anchorage, will enable Jewel clients to obtain loans or lines of credit using their stored digital assets in a safe and secure manner, all from within the security of custody”.
Anchorage's custody offering is said to provide digital-asset security without the drawbacks and limitations of cold storage, such as “the susceptibility to human error and theft, and its inaccessibility”.
Nathan McCauley, Anchorage co-founder and chief executive officer, said: “As the lines continue to blur between the digital-asset space and traditional finance — and as the institutional appetite for crypto-native financial services continues to swell — relationships like this one will play a key role in accelerating the maturation of the space, as well as crypto's broader adoption.
“Anchorage is proud to be working alongside banks and other financial institutions like Jewel to deliver the kind of secure, standard-setting service that institutions have come to expect from their financial platforms.”
• Jewel has a website at https://www.dltjewel.com