Bermudian-based Mountain Protocol Limited has been granted a Class M digital asset business licence by the Bermuda Monetary Authority.

Business activities allowed under the licence are issuing, selling, or redeeming virtual coins, tokens, or any other form of digital asset, and providing custodial wallet services.

The licence has been granted for an initial period of one year.

Law firm Carey Olsen, which advised Mountain Protocol on the matter, said this was the first time that a licence has been issued to a business operating with an ERC20 rebasing token, a technical standard and form of digital asset issued on the Ethereum block chain.

The firm said that Mountain Protocol provided its users with a platform to purchase and redeem USDM, an ERC20 rebasing token designed to maintain a value match with the underlying fiat currency.

Martin Carrica, the founder of Mountain Protocol, said: “It is refreshing to work with regulators like the BMA, who understand block chain technologies and can have substantive discussions about where things can be done differently with block chain.”

Carey Olsen said that partners Steven Rees Davies and Matthew Grigg had advised on the licence application, with the assistance of counsel Charissa Ball and associate Michelle Meyer.

Mr Rees Davies said: “We are pleased to have supported Mountain Protocol on obtaining their digital asset business licence.

“The business model is innovative in the way it achieves product and service objectives and is an excellent example of a real-use case for block chain technology.

“It has been particularly exciting working on a project involving a rebasing ERC20 token at its core, which is a market first for a Bermuda licensed company.

“We look forward to seeing the growth of Mountain Protocol following its successful acquisition of this licence.”