Coinbase secures Bermuda license, plans to launch offshore derivatives exchange, leveraging regulatory clarity and favorable tax laws.
Cryptocurrency exchange Coinbase, based in the United States, has recently been granted a license to operate in Bermuda, with intentions to rapidly establish a derivatives exchange on the island. Moreover, according to reports, the offshore exchange may be operational as early as next week, marking a significant achievement for the organization.
On April 19, Coinbase revealed in a blog post that the Bermuda Monetary Authority, the country’s financial regulatory body, had issued a regulatory license to the company. The license, classified as a Class F License under the Digital Asset Business Act, empowers Coinbase to carry out a variety of activities. These include token sales, issuance, operating as a digital asset exchange, and serving as a digital asset derivatives exchange provider.
Imminent Offshore Exchange Launch in Bermuda
A Forbes report on April 19, citing an individual familiar with Coinbase, confirmed the company’s intention to inaugurate a derivatives exchange in Bermuda within the next week. Hence, this move is in line with Coinbase’s strategy to “expand broadly and delve deeply” by creating regulated entities and local operations to foster global growth. The firm has also made headway in Brazil, Canada, Singapore, Europe, and the United Arab Emirates, maintaining a uniform approach in collaborating with governments and regulators across various markets. Coinbase’s goal is to become the most reliable and compliant crypto enterprise in every market it enters.
Bermuda’s clear regulations were a major factor in Coinbase’s decision to select the island as one of its financial centers. Additionally, Bermuda is renowned for its stringent, transparent, compliant, and collaborative regulatory landscape. Furthermore, the tax laws in Bermuda render it an enticing location for corporations seeking to minimize expenses. Although businesses must pay a payroll tax, the corporate tax rate is 0%, which allows profits to be tax-exempt.
Coinbase’s Future in the US: A Subject of Speculation
Some individuals within the crypto community suspect that this development could foreshadow the eventual departure of Coinbase from the United States. This conjecture follows a statement by Coinbase CEO Brian Armstrong at a fintech event in London, in which he mentioned the likelihood of the exchange exiting the U.S. due to a lack of regulatory clarity. Moreover, Armstrong has been candid about his concerns regarding crypto regulations in the United States, arguing that the Securities and Exchange Commission has not supplied sufficient regulatory direction, causing investors and trading activities to move abroad.
Coinbase’s expansion into international markets is a critical component of the crypto exchange’s growth strategy, as it continues to cultivate relationships with governments and regulators around the globe. Therefore, the company’s pursuit of regulatory compliance and commitment to building trust in every market it enters demonstrate its dedication to becoming a global leader in the cryptocurrency industry.