Bermuda Digital Asset Business Act 2018

Bermuda’s Digital Asset Business Act 2018 is the national licensing and supervisory statute for persons carrying on digital asset business in or from within Bermuda. The Act, cited as 2018:28, gives the Bermuda Monetary Authority authority to regulate digital asset businesses and protect the interests of clients and potential clients. The Act received assent on June 25, 2018 and became operative on September 10, 2018; the consolidated law record lists amendments through 2024:34, and BMA rules made under the Act were further updated in 2025 for custody of client assets.

What the Bermuda Digital Asset Business Act covers

The Act defines a digital asset broadly as something that exists in binary format and comes with a right to use it, including a digital representation of value used as a medium of exchange, unit of account, or store of value, or a token representing assets, rights, or access to an application, service, or product by means of distributed ledger technology.

For perimeter purposes, a person carries on digital asset business in Bermuda if it is formed in Bermuda and carries on covered digital asset activity, or if it is formed outside Bermuda and carries on covered activity in or from within Bermuda. The Minister of Finance, acting on BMA advice, may also make orders specifying when a person is or is not treated as carrying on digital asset business in Bermuda.

Licensing under Bermuda’s DABA framework

The Act restricts digital asset business in or from within Bermuda unless the person is a licensed undertaking in one of the statutory licence classes. Current covered activities include issuing, selling or redeeming digital assets; digital-asset payment services; digital asset exchanges; digital asset trust services; custodial wallet services; digital asset derivative exchange services; digital asset services vendor activity; and digital asset lending or repurchase transaction services.

The licence classes are Class F, Class M, and Class T. Class F covers full digital asset business activity. Class M covers activity for a defined period determined by the BMA. Class T covers defined-period pilot or beta testing. The BMA’s current digital asset business page describes the same three licence types and current activity categories.

Application, governance, custody, and AML/ATF obligations

• Application requirements: Applicants must submit a business plan, management arrangements, policies and procedures for obligations under the Act and Bermuda AML/ATF rules, other information required by the BMA, and the prescribed fee.
• Minimum criteria: The BMA may grant or refuse a licence and may impose limitations or conditions; it may not grant an application unless the Schedule 1 minimum licensing criteria are satisfied.
• Governance: Controllers and officers must be fit and proper, the business must be conducted prudently, and licensees must maintain appropriate governance, records, systems, and risk controls.
• Client assets: Licensed undertakings holding client assets must keep separate accounts, maintain approved protection arrangements, and hold enough of each digital asset type to meet client obligations.
• AML/ATF status: The Act’s consequential amendments bring digital asset businesses into Bermuda AML/ATF financial institution treatment.

Supervision, disclosure, and 2025 custody rules

The BMA may require information, reports, and documents to monitor compliance and safeguard client interests. Licensees must notify the BMA of controller or officer changes, material business changes, cyber reporting events, and other prescribed matters. The BMA may also restrict or revoke licences, issue directions to protect clients, impose civil penalties, publicly censure, and use investigation powers under the Act.

The 2025 custody rules apply to client assets held by licensed undertakings providing custodial wallet services. They require separation of client assets from a licensee’s own assets, proper and prompt accounting, client-asset controls, annual review of those controls, monthly reconciliation, and specific treatment of client assets after pooling or intermediary default events. The rules were made on February 12, 2025 and became operative the same day.

Status and timeline

As of June 5, 2026, editors should classify DABA as Bermuda’s in-force digital asset business licensing and supervision regime. It should be distinguished from Bermuda’s separate Digital Asset Issuance Act 2020, which addresses digital asset issuance rather than the licensing perimeter for ongoing digital asset business activity.