Bermuda Signs MOU with Blockchain Project Shyft for $10 Mln in Economic Development

Bermuda signs memorandum of understanding with Shyft blockchain network that provides compliance and identity checks.

The Government of Bermuda has recently signed a memorandum of understanding (MOU) with Shyft network which provides blockchain-based ID solutions for Know-Your-Customer (KYC) and anti-money laundering (AML) compliant data transfers, Shyft reported in a blog post May 15.

According to the MOU, Shyft network will spend up to $10 mln on blockchain technology education and economic development. Premier and Minister of Finance of Bermuda David Burt signed the MOU, commenting that the partnership with Shyft will promote high standards of technology and regulations. Burt said that Bermuda “is able to accelerate economic growth, create jobs and attract global interest.” He stated:

“The Government of Bermuda has decided to lead the way and build interoperability into the government legislation, in essence, approach regulatory frameworks with exportability in mind… We’re leading the world in digital assets regulation, there’s no other country that provides comparable certainty and [a] progressive regulatory environment.”

The terms of the MOU state that the Toronto-based blockchain network will collaborate with the government in developing and improving “a robust legal and regulatory framework.” Shyft will also train Bermudians in blockchain technology and development through the country’s Department of Workforce Development.

While MOUs are useful instruments for showing intent and building bilateral relationships between governments and businesses, they are not legally binding. One advantage of MOUs for some governments in that, since they do not carry legally enforceable conditions, they may be issued and adopted without legislative approval.

In April, the Premier of Bermuda signed a MOU with Binance, the world’s second largest cryptocurrency exchange by market capitalization, to receive funding for educational programs related to fintech and blockchain startups. According to the MOU, Binance will provide up to $10 mln for university level training for Bermudians in the blockchain field, as well as invest up to $5 mln to support new blockchain-based firms in the country.

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Russia’s Digital Economy Bill Supported by State Duma Committee in Move Towards Crypto Regulation

The State Duma’s Committee for Legislative Work will support a digital economy initiative that will “minimize” the risks of citizens using digital assets.

Russian State Duma’s Committee for Legislative Work will support the first reading of an initiative that will add the basic norms of digital economy to the Russian Federation Civil Code.  This is the latest step on the road to regulating cryptocurrency in the country, local news outlet Izvestia reports Wednesday, May 16.

Pavel Krasheninnikov of political party United Russia and head of the Legislative Work committee, told Izvestia that the initiative aims to “minimize the existing risks of using digital objects for transferring assets into an unregulated digital environment for legalization of criminal incomes, bankruptcy fraud or for sponsoring terrorist groups.”

The initiative, which is scheduled to be considered next week, does not mean that digital currencies will now become a legitimate means of payment. Instead, a separate law developed by the Central Bank, the Ministry of Finance, and the Ministry of Economic Development will set conditions for digital currencies to be used as payment “in controlled quantities.” The initiative does assert that digital confirmation by a user in a smart contract is equal to his written consent.

Russia first prepared a bill “On Digital Financial Assets” in March of this year, which would provide federal laws governing cryptocurrencies and Initial Coin Offerings (ICO) inspired by President Vladimir Putin’s decision to begin crypto regulation on July 1.

The March 20 draft defines crypto and digital tokens are assets only to be traded on authorized exchanges, also requiring user account at crypto exchanges to comply with AML and counter terrorism financing regulations. A review draft of the bill from mid-April added that the exchange of crypto for fiat above around $9,600 will be subject to mandatory currency exchange regulation.

Igor Sudets, the director of the program “Blockchain for Lawyers” at the Plekhanov Russian University of Economics in Moscow, told Izvestia that “it is important that the crypto currency and tokens are included in the legal field of the Russian Federation”:

“On the one hand, these are opportunities that we have no right to miss. On the other hand, while they are outside the legal field, they can be used to give bribes, withdraw money in the case of bankruptcy, pay ‘black salaries, and simply get stolen – with no repercussions [for criminals].”

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