Initial Coin Offering (ICOs) is a great way to raise funds for a particular company. However, today, ICOs are facing additional regulatory scrutiny. In fact, in the US, the US Securities and Exchange Commission mentioned that most of these ICOs will fall under securities based on the Howie Test. And also, the numbers are also not in favor of ICOs. You have a good number of ICOs that are considered a scam.
Recently, the government of Bermuda has awarded the very first certification for an ICO. The certification was given under the island’s new regulatory regime for the crypto and blockchain industry.
Minister of National Security Wayne Gaines announced that the company Uulala was awarded the certification by the Bermudan government. Wayne Gaines’ office is responsible for overseeing ICT policy and innovation.
In July, new regulations were introduced pertaining to ICOs. The new regulations were introduced to the lower house by Premier and Minister of Finance of Bermuda David Burt. Given the new regulations, the ICOs are requested to provide detailed information regarding the people who are involved with the said ICO.
Along with information about the people involved in the ICO, the issuer will also have to disclose a review of the project. Here, different aspects will have to be revealed including the financial system, market audience and the product or service. There is also a part wherein the issuer will have to open up about the technical aspects associated with the software that they are to use not to mention the plan for the finances that they are going to raise.
Improving Financial Inclusion of Unbanked and Underbanked
What makes Uulala a great project is the fact that it targets those who are unbanked and underbanked. The company mentioned that they have developed a decentralized peer-to-peer network. The role of this network is to “load cash into the digital economy”.
The users will have an access to a virtual MasterCard once there are funds. Here, they can participate in different transactions including payment of bills, cross-border transactions, and other forms of e-commerce.
The CEO Oscar Garcia mentioned that Uulala is looking to raise around $50 million dollars. It has been able to raise $10 million already. However, Garcia expressed the difficulty that the firm has to go through in order to have its license. He said that “Bermuda is known as a financial hub and it is very forward thinking on blockchain and fintech…They have a reputation of being excellent regulatory stewards and we thought that would be better for us than a jurisdiction where we could say we’re good, they’d believe us and give us approval in three weeks”.
Regulatory changes differ from one country to the next. In fact, there are some countries such as Malta that has become home for many fintech and crypto-related businesses. In addition to this, there are also the likes of Japan that has fully embraced cryptocurrencies.
Bermuda, on the other hand, has been cultivating a regulatory environment that attracts the blockchain industry in the past year alone. They also amended the banking law in order to cater to fintech and crypto-related businesses.