Bermuda can be world’s ‘digital free port’
Bermuda's move towards embracing cryptocurrency and blockchain technologies has been welcomed by the man who brought leading fintech innovators and thinkers to the island this year.
And Stan Stalnaker believes Bermuda can become the world's first digital free port — that is a major digital storage vault with global standing, and also a platform for start-ups “looking to operate and think globally”.
Mr Stalnaker is a founding director of Bermudian-headquartered Hub Culture, an online social network with 45,000 members around the world. The organisation created and manages Ven, the world's first digital currency.
Hub Culture hosted a three-month innovation campus at Ariel Sands during the summer, which was attended by innovators and influencers from a range of fields, including cryptocurrency and digital ledger technologies. Last month, the Bermuda Government signalled its intention to be a welcoming jurisdiction for companies and innovators involved in those technologies by creating a digital ledger technology task force to develop and put in place strategies for the island.
Mr Stalnaker said: “We were very happy to see the Government's announcement about the crypto working groups. It shows it is paying attention to what is going on and also being very cautious about it. They are not rushing into anything, they are evaluating it in a considered way.”
Bermuda's task force is split into two working groups, with one focused on business development and the other on legal and regulatory matters. Government technical officers, officials from the Bermuda Business Development Agency, and legal and industry specialists in fintech are members of the task force, which is under the direction of Wayne Caines, Minister for National Security.
Mr Stalnaker said other countries have similar objectives, including the US, China, Russia, Switzerland, Luxembourg, Singapore and Barbados.
“There are many small countries in the realm that Bermuda is, and they are ahead. They have dozens of companies and have been very active over the last two years.
“But Bermuda has a golden opportunity to participate in this and get involved, and also maintain its gold standard.”
Hub Culture was formed as a company in 2006 and chose Bermuda as its base, having looked for the best location to structure a digital asset. It holds events mostly as temporary pop-ups around “important moments” in the world. For the past decade it has been a media partner to the World Economic Forum in Davos, Switzerland.
At the 2018 event, which takes place next month, Hub Culture aims to stimulate more interest in Bermuda and its potential as a digital free port. It has already started the process of spreading the word with the creation of a new website, called Bermuda Standard.
“We are working to create digital capabilities to promote Bermuda as the world's best place for identity, AML (anti-money laundering), KYC (know your customer), beneficial ownership information — to create a digital layer between the nation state and the individual, where you have secured data that is managed out of Bermuda,” said Mr Stalnaker.
“You start to think of Bermuda as the world's first digital free port. Over the next five years there is going to be tremendous demand from citizens all over the world to store their digital assets in secure places, in secure jurisdictions.”
Those digital assets could include property title deeds, marriage certificates, vehicle registration documents, ownership contracts and crypto currencies, such as bitcoin, ripple, and Ven.
“I imagine Bermuda as this giant digital storage vault for digital assets, where you have IP protection, good governance, legal and trademark protection and then a security layer, so a person can park a digital asset here in Bermuda and know that it is safe in the long term.
“It starts with digital currencies, but it is already moving into all types of digital identity and information, which is why we are building Bermuda Standard.”
Mr Stalnaker said digital assets will end up on blockchain, a decentralised, verifiable digital ledger technology.
“And if you can have digital governance for a digital free port here in Bermuda, it will attract people to store their digital assets here.”
Mr Stalnaker imagines that by 2020 Bermuda could be the best place in the world for the storage of digital assets, and that is a message Hub Culture will promote at the World Economic Forum next month. Hub Culture will focus on three topics in Davos, namely cybersecurity, conscious machines, and innovative states.
Explaining the innovative states programme, Mr Stalnaker said it would look at “how you get to innovation within countries, and this idea of Bermuda as a location for storing digital assets”.
He added: “By next summer, if the Government is diligent about getting in front of the category, there are going to be a lot of people who are going to have new interest in Bermuda.
“We are already seeing it. We have five companies that we are talking to that are interested in opening in Bermuda. Now that the Government has sent signals that it is open to being innovative, we are talking to those companies about setting up here.”
Hub Culture and BDA representatives have visited California's innovation centre, Silicon Valley, where meetings have been held to promote the advantages of Bermuda to start-ups that want to operate and think globally.
Mr Stalnaker said his goal is to see a number of companies working in digital assets come to Bermuda by the end of next year.
And Hub Culture's higher profile presence in Bermuda is set to continue, with the organisation close to securing a sponsorship deal with the Bermuda International Film Festival, and an expected creation of a virtual reality category in festival line-up. There is also the chance of a possible return of the innovation campus to the island in the summer.
Hub Culture has a website at www.hubculture.com