Why is a body of which many UK solicitors are members so excited about the growth of digital currencies in Bermuda?

Posted on

The Society for Trust and Estate Practitioners (STEP) has noted on its web site that:

The Bermuda government has launched a bid to accelerate the establishment and growth of digital currency business on the island. The initial framework for regulating Bermudan firms that use Distributed Ledger Technologies will come into force in early 2018.

A task force has been set up to draft the new legislation. Two teams — the Blockchain Business Development Working Group and the Blockchain Legal and Regulatory Working Group — will collaborate to design a regulatory environment that promotes Bermuda as a destination for utility tokens, tokenised securities, cryptocurrencies, and coin offerings. Bermuda-based token issuers will have to join the new Bermuda Crypto Association and comply with its code of conduct, including measures to ensure enhanced business transparency, and Know Your Customer and anti-money laundering rules.

The Bermuda Development Agency is pushing the move as part of an economic diversification strategy to bring new business to the island, and boost existing industry service providers. It has persuaded several US cryptocurrency start-ups to set up companies in the jurisdiction.

Now there's a surprise. A tax haven is promoting the use of cryptocurrencies whose use is untraceable just as automatic information exchange from the island is coming into use. What possible interest would they have in this?

But there's another, as important, question. Why are STEP, which has done a great deal to spread tax haven activity from jurisdiction to jurisdiction, despite which many UK solicitors are members, so keen to promote this? Superficially this has nothing whatsoever to do with their purpose, which they say is:

STEP is the global professional association for practitioners who specialise in family inheritance and succession planning.

And if it has, would they like to say what that link might be? I'm curious to know. I'm happy to host the explanation.

Hat tip: Naomi Fowler