The British Virgin Islands (BVI) has become a significant crypto hub, housing tokenized US Treasuries worth over $1.5 billion and attracting firms like Kraken and Bitfinex. However, companies primaril
The British Virgin Islands (BVI) has emerged as a key player in the cryptocurrency ecosystem, with more than one-tenth of global tokenized US Treasuries issued there. This makes it second only to the United States among jurisdictions hosting such assets. Cryptocurrency exchanges like Kraken and Bitfinex, along with other digital asset firms including 1inch, have established operations or incorporated entities in the BVI.
Despite its reputation as an offshore tax haven, companies are now choosing the BVI for regulatory clarity rather than solely tax benefits. The territory offers no corporate income tax or capital gains tax on BVI companies, but this is becoming a common feature among leading crypto hubs like the Cayman Islands and United Arab Emirates (UAE).
According to Andrew Jowett from Appleby (BVI) Ltd., clients researching incorporation options typically compare several jurisdictions. He noted that while tax neutrality remains important for cross-border structures, legal certainty and regulatory clarity are now more critical as tokenization moves into institutional finance.
Companies like Ethra, an institutional digital asset infrastructure provider based in the BVI, emphasize the importance of legal frameworks over mere tax benefits. Jack Yang, founder of LTP, a firm operating regulated entities across multiple jurisdictions, stated that practical value lies in structures capable of passing rigorous regulatory reviews by banks and auditors.
The shift towards more stringent regulatory requirements is evident among decentralized finance (DeFi) protocols like 1inch, which chose the BVI for its predictable rules. Orest Gavryliak, chief legal officer at 1inch, highlighted that jurisdictions now compete based on their ability to provide stable and transparent legal infrastructure.
This development underscores a broader trend where crypto hubs are shifting from purely tax-driven decisions towards those that ensure long-term institutional adoption through robust regulatory frameworks.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.