The Cayman Islands is benefitting from the growing global blockchain and cryptocurrency craze, with dozens of companies involved in the technologies moving here over the last six months.
Cayman Enterprise City CEO Charlie Kirkconnell said at this week’s “d10e” blockchain conference that some 50 blockchain companies have established or are in the process of setting up shop at “Cayman Tech City” – the recently branded branch of the special economic zone that caters to tech-related entities. Now, about 25 percent of the total Cayman Enterprise City tenants are blockchain companies, according to Cayman Finance CEO Jude Scott.
Sensay co-founder Crystal Rose said conducting her firm’s initial coin offering – a fundraising mechanism where blockchain companies sell their cryptocurrencies to investors – from Cayman’s tax-friendly environment was a no-brainer.
“We’re taking Bitcoin from places around the world, and America would tax that instantly as income … but that money is going to be circulated back into the company as an investment,” said Ms. Rose, whose company creates blockchain-based smart contracts.
Additionally, Cayman’s straightforward regulations made the jurisdiction more attractive than staying in the United States. Blockchain companies are subject to know-your-client and other anti-money laundering rules, but Ms. Rose said that the U.S. Securities and Exchange Commission issued two conflicting statements about fundraising rules within the span of five months.
Mr. Kirkconnell said that Cayman Tech City is trying to make setting up businesses here as easy as possible. Cayman Tech City officials will help with entrepreneurs obtaining all their necessary licenses and permits, and can usually have them ready to do business from the territory within four to six weeks of an application, he said.
That was the experience of Hercules SEZC President Cynthia Blanchard.
“[Cayman Enterprise City] helps guide you through the process, and makes it easy as possible,” said Ms. Blanchard, whose company uses blockchain for supply chain management. “Now, we have a community here.”
Given that the influx of blockchain companies has occurred just within the past six months, Mr. Kirkconnell said he expects dozens more to come here in the near future. The one thing the territory needs to prepare for that migration is more workers with technical skills, he said.
To that end, Cayman Tech City is setting up a training academy to teach residents coding and other tech skills. Mr. Kirkconnell said that Cayman Tech City has signed an agreement with the U.S.-based school Code Fellows to use its curriculum and that more information should be made public about the arrangement in the near future.
“One thing we need to respond to is many of these companies are looking for qualified, trained technical people, and that’s a bit of an issue here,” he said. “So we’re aiming to create a locally available critical mass of technical talent from local community.”