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Scott decries total dependence on fintech

One Bermuda Alliance deputy leader Leah Scott

Opposition MPs warned the Government not to put all its eggs in the “fintech basket” during the Reply to the Throne Speech session in the House of Assembly.

One Bermuda Alliance deputy leader Leah Scott questioned when the money from cryptocurrency exchange company Binance was going to materialise and when jobs in fintech would begin to emerge.

Binance planned to set up a global compliance centre in Bermuda and in its Memorandum of Understanding said it would put $10 million towards related educational programmes and $5 million for blockchain start-ups.

“What happened? Binance is in Malta and is looking for jurisdictions with a light regulatory approach,” Ms Scott said. “Is it going to happen in Bermuda?”

Ms Scott said that the Trump Administration was making onshore business as attractive as offshore.

“Now most of the people who are offshore are here not for tax purposes but for other reasons.

“But with all of the regulatory requirements coming down the pipeline, it is making it very uncomfortable for them to be here. So if we lose that business, we lose jobs, we lose revenue, we lose people who are contributing to our economy and people who are creating jobs. We don’t have a substitute for that.

“We have tourism which, for the second year in a row, has had record numbers but there is concern that there will be a change to the legislation, which will compromise its independence.”

Shadow Minister of Home Affairs Sylvan Richards said until he saw something concrete coming out of the fintech industry for the benefit of Bermuda, he would consider it “a sideshow”.

While Mr Richards said he supported blockchain efforts, he said the technology was “still in its infancy”.

“Reinsurance is looking at it, it’s nothing controversial. The problem is that it’s being used in non-critical operations. No one has figured out how to monetise blockchain — it’s being used to create efficiencies.”

Responding to criticisms surrounding the Government’s pursuit of the fintech industry, Government Whip Lawrence Scott said: “Fintech companies are successful because they see the vision before it comes to fruition”.

National security minister Wayne Caines, one of the leading figures driving fintech in Bermuda, added: “We are putting together industry. Rome wasn’t built in a day.”

Mr Caines disputed claims from the Opposition that the Progressive Labour Party was banking on fintech to create jobs. He said: “We can walk and chew gum at the same time.”