Bermuda’s digital asset licensing evolution: ERM as a strategic imperative

The Bermuda Monetary Authority’s (BMA) Guidance Note for Digital Asset Business Licensing marks a major milestone in Bermuda’s regulatory evolution. Building on its earlier consultation on Payment Services Providers, the framework makes one message clear: enterprise risk management (ERM) is now essential for licensing success, operational resilience and sustained market credibility. 

A new chapter in digital asset regulation

Under the Digital Asset Business Act 2018, the BMA’s updated guidance introduces a tiered licensing regime (Classes T, M and F) and a comprehensive set of expectations across governance, risk, compliance and operational domains. Whether launching a stablecoin, operating a digital asset exchange, or offering staking services, firms must demonstrate risk-aware business models from day one. 

The Authority’s proportionality principle ensures that regulatory expectations scale with business complexity, but the bar for sophistication rises sharply with each license class. 
Bermuda’s approach reflects a wider global shift toward embedding enterprise risk management into digital asset regulation. Regulators in jurisdictions such as Singapore, the United Kingdom and the European Union are applying similar principles that emphasize governance, operational resilience and cybersecurity.  

By aligning with these international standards, Bermuda enhances its credibility as a trusted and competitive jurisdiction for digital asset businesses, giving licensed firms greater confidence when engaging with investors, banking partners and overseas regulators.

A fast track to full licensing

As with the Payment Services Provider framework, the BMA explicitly rewards applicants with robust governance and risk management capabilities. Class F applicants demonstrating advanced ERM frameworks (covering operational, credit, market, liquidity, and cyber risks) are positioned for direct access to full authorization.

In short, ERM maturity accelerates licensing, reduces regulatory friction, and builds trust with supervisors.

Core ERM expectations

The BMA’s guidance reinforces ERM’s enduring importance. Risk management has long been a cornerstone of sound financial operations. For digital assets, its relevance is amplified. The Authority’s expectations reflect a mature understanding of ERM as a strategic discipline, not just a compliance checkbox.

Applicants must demonstrate:

• Three lines of defense (3LOD): clear separation of operational, risk, and audit functions.
• Risk appetite & KRIs: defined thresholds and early warning indicators to monitor risk exposure.
• Stress testing & scenario analysis: tailored to digital asset volatility and liquidity dynamics.
• Cyber risk & custody controls: including penetration testing, secure development practices, and compliance with the Custody Code of Practice.
• Internal audit: independent oversight with formal reporting lines and remediation tracking.

These expectations are not new, but they are now non-negotiable for firms seeking to operate in Bermuda’s regulated digital asset ecosystem.

ERM as an enabler

Organizations that embed ERM into their digital asset strategy unlock multiple advantages:

• Licensing acceleration: mature ERM frameworks enable direct qualification for Class F licenses.
• Operational resilience: risk-informed decision-making reduces downtime, losses, and reputational damage.
• Investor confidence: institutional clients and partners demand transparency and risk governance.
• Scalable growth: ERM supports expansion into new jurisdictions, products and customer segments.
• Regulatory alignment: Proactive risk management fosters collaborative relationships with the BMA.

Looking Ahead

Bermuda’s digital asset licensing regime is a gateway to global opportunity, one reserved for firms that combine innovation with exemplary risk management. ERM remains the language of trust, resilience, and regulatory success.  

To explore how your organization can strengthen its ERM framework in line with the BMA’s guidance, contact Grant Thornton Bermuda’s Risk Advisory team.