At the wake of contemporary regulatory setbacks by the government of most developed nations such as the United States, crypto payment processing company Circle, has decided to ship a bulk of its exchange operations overseas.
Since the advent of cryptocurrencies, most governments around the world have been lagging behind with regards to the regulatory requirements driven by rapid innovation in sustaining digital assets. However, a few regions in Europe and Asia such as Malta and Bermuda has leaped forward with an exceptionally well designed and comprehensive regulatory framework.
With that of Bermuda specifically the Digital Assets Business Act of 2018 (“DABA”). Circle becomes the first renowned fintech company to receive a Class F (“Full”) DABA license that allows the company to carry out such operations as payment services, custody, exchange, trading and other financial services that use digital assets. In their blog post, the company asserts:
“Bermuda’s pioneering approach is the kind of regulatory framework we’ve long advocated to unleash growth in the crypto industry. Moreover, we’ve witnessed first hand that the Bermuda government is prepared to iterate and evolve new regulatory rules alongside the pace of technical innovation in the crypto and blockchain field.”
Corresponding to this press release, Circle CEO Jeremy Allaire disclosed to reporters that the sole aim of this move is in a bid to tend to Poloniex Users who are not resident in the US.
An estimated 70 percent of this customer-base would originate from outside the United States, and the newly-launched Bermuda-based arm of the company will now handle those accounts. Adding to this he also affirms that Asian investors are well familiar with the USDC stablecoin. He said:
“Europe and Asia are both pretty significant markets for us in particular.
The lack of regulatory frameworks significantly limits what can be offered to individuals and businesses in the U.S.”
Noting the reasons behind the lay off of 30 employees from Circle’s team within the first quarter of 2019, Allaire subsequently attributes this reduction of staff to the regulatory instability present in the US.
Furthermore, he establishes an overview of the company’s plans to acquire more employees in the near future: within the next 24 months Circle is looking forward to stocking it’s Bermuda group with a 30-men team, with increased capabilities to focus on the global markets.
Through the new subsidiary called “Circle International Bermuda”, the company would provision nascent and diverse assets to its global clientele. Circle intends to offer a variety of services specifically related to digital assets, over time with plans to expand the Poloniex crypto exchange services to include traditional financial services that were formerly not supported due to the tightened regulatory requirements in the U.S.