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The Bermuda government is pushing on with its ambitious plans to become a cryptocurrency hub despite the massive market downturn in 2022.

The small island territory known for its pristine pink sand beaches and attractive taxation policies has been actively expanding its crypto sector since 2017, according to Bermuda’s minister of economy and labor, Jason Hayward.

He noted on June 3 that the government remains unfazed by the recent crash caused by the collapse of the Terra ecosystem in May, as the market has weathered many storms since 2017.

Speaking with the Wall Street Journal (WSJ), Hayward pointed to the experience of the economy and local regulators in dealing with foreign business as a key factor that will help Bermuda become a crypto hub. He also bullishly stated that the crash will not hamper its plans moving forward:

“We are aware of the recent devaluation in the price of cryptocurrencies and remain confident that it does not threaten the island’s ability to become a crypto hub.”

“This industry downturn is likely to advance our goal and positively impact our long-term growth and role in this sector,” he added.

So far the Bermuda Monetary Authority (BMA) has granted a total of 14 licenses for crypto firms to operate out of the British island territory, with four of those being approved in 2022, noted Crag Swan, chief executive of the BMA.

The total list includes companies such as multi-asset-class trading firm Class T, crypto exchange Bittrex Global, USD Coin (USDC) issuers Circle Internet Financial Ltd., and crypto interest account providers  BlockFi, who obtained a license in January earlier this year.

Swan highlighted, however, that the BMA is not looking to accept anyone that wants to set up shop in Bermuda and is looking at quality over quantity as part of its crypto hub ambitions.

“So obviously the persons that we want in Bermuda must be fit and proper because essentially we’re looking at maintaining the jurisdiction’s quality name,” he said.

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Hayward stated that Bermuda’s licensing process is broken down into three stages: the testing license, a modified license, and finally the fully approved operating license. The testing phase usually lasts between three to 12 months but did not provide a comment on how long it takes to get fully licensed by the BMA.

Commenting on the regulatory landscape in Bermuda, the president of the Financial & International Business Association (FATF) David Schwartz, told the WSJ that the Bermuda government has been making strides in its anti-money laundering compliance initiatives since 2020, but there was still work to be done.

The Paris-based FATF sets global AML-standards, and Schwartz suggested the success of Bermuda’s crypto sector may hinge on how strongly the government oversees and regulates the companies that it offers licenses to:

“They’ve got great rules and regulations and laws, but it’s all about the implementation at the end of the day.”