The Bermuda Monetary Authority has released a draft Code of Practice for Digital Asset Custody, designed to protect the public and provide greater clarity about the BMA’s expectations for proper custody of cryptocurrency and other digital assets, according to a press release issued on December 18.
In the statement, BMA Senior Advisor for financial technology said:
“The Code complements the extensive body of rules for Digital Asset Businesses published by the BMA. We view custody as an important part of a healthy digital asset ecosystem – one that will encourage quality players to contribute positively to our financial system. We remind stakeholders that the framework was built with the aim of making sure that the core objectives of financial regulation are respected, that is: protecting consumers, ensuring stability of our institutions and maintaining integrity and confidence in financial markets – with a focus on maintaining the highest standards of AML/ATF.”
The proposed rules were issued in accordance with powers granted to the BMA under the Digital Asset Business Act of 2018, and addresses a variety of concerns like key generation, the handling of transactions, hot and cold storage, and proper incident reporting.
The BMA has invited comments on its proposed Code of Practice until January 18, 2019.
The Authority’s proposed rules for digital asset custody are part of Bermuda’s ongoing effort to create a crypto-friendly environment for the industry. The self-governing British Overseas Territory has previously proposed regulatory guidelines for initial coin offerings and moved to amend banking laws to ensure that blockchain and fintech companies can secure banking services.