DESTINATION DIGITAL The strategic priorities of global fintech executives

DESTINATION DIGITAL The strategic priorities of global fintech executives

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Contents 4

Foreword

5

Executive Summary

6

Chapter One: Pressures and Priorities for Global Fintech Businesses

10

Chapter Two: Going Global: Fintech Expansion and Jurisdictional Choice

14

Chapter Three: Trust, Risk and the Regulation Equation

18

Chapter Four: Feeding rather than stifling innovation: Fintech, DeFi, and DAOs

21

Conclusion

22

Afterword

23

Methodology

23

Acknowledgements 3

Foreword

A new generation of business has emerged in financial services. Rapid technological advancement, and changing consumer and business demands, has seen the rise of fintech and digital businesses that look beyond borders as they scale. For them, it is imperative that new products and services are delivered to clients globally, and as quickly as possible.

As they do, they must navigate complex and volatile geopolitical and economic conditions, and crucially, evolving regulatory frameworks as countries try to come to terms with the pace of change. In this year alone, we’ve seen a pro-crypto and blockchain Trump administration in the United States of America (US) put in place measures for lighter touch regulation and vow to remove the previous administration’s socalled ‘Operation Chokepoint 2.0’, while the United Kingdom’s (UK) Financial Conduct Authority (FCA) is looking at the future regulation of cryptoasset activities, and this follows hot on the heels of Markets in Crypto-Assets Regulation (MiCAR) in Europe last year. As governments oscillate between innovation and tighter regulation, it’s clear there is no single standard or approach globally.

This has created a fragmented operating environment for fast-scaling companies operating on a global stage. As they plot out their roadmaps for growth, where to incorporate their businesses has become critical to how they navigate the complex web of regulation and geopolitical pressures, and how they balance credibility and security with the ability to innovate at pace.

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Given the context of volatility, it is critical to understand the needs of this new generation of business, and how they are evolving. To do so, we commissioned a thirdparty survey of 451 fintech business leaders across core markets - USA, UK, Mexico, Singapore, Hong Kong, and Mainland China (China).

From the findings, one thing is crystal clear.

International Financial Centres (IFCs) have a pivotal role to play. As businesses within the global fintech sector increasingly seek to incorporate in jurisdictions which understand the challenges and support them with the right tools, infrastructure and expertise for growth, IFCs will remain critical to the industry’s transformation and global growth.

The British Virgin Islands (BVI) will remain at the forefront of this wave of innovation. For over 40 years, the BVI has offered businesses access to global markets, a supportive tax regime for international business, robust legal frameworks and licensing and on-island professional services. It has and will continue to support businesses’ ability to invest, operate and grow efficiently across borders, balancing the highest international regulatory standards with support for innovation.

Elise Donovan CEO, BVI Finance

Executive Summary This report examines the strategic priorities, challenges, and jurisdictional considerations facing global fintech businesses, with a particular focus on the role of International Financial Centres (IFCs) in enabling sustainable growth and innovation amidst a time of accelerated transformation.

Key findings and takeaways

01

International expansion is paramount

02

Technology is a strategic imperative

03

Regulatory clarity drives jurisdictional choice

04

Risk, trust and compliance remain core challenges

05

IFCs role as growth enablers offering innovation without compromise

A striking 94% of fintech leaders consider cross-border growth either critical or important to their success, with 63% already operating through entities in IFCs. These jurisdictions offer vital advantages including access to capital, streamlined regulation, and cost efficiency.

Investment in emerging technologies is seen as crucial to staying competitive. Nearly half (46%) of fintech businesses cite tech integration as a priority to enhance operational efficiency, with nearly two-thirds of business leaders within tokenisation (59%), virtual assets (57%), and exchanges (64%) especially focused on automation and digital infrastructure.

The choice of incorporation location hinges on access to international markets, favourable regulatory environments, and licensing clarity, cited by a third (32%) as essential. The BVI stands out for providing a robust legal framework aligned with global standards, including through measures such as the Virtual Assets Service Providers Act, 2022 (VASP).

Two-fifths of fintech businesses report facing mounting pressures from cyber threats (41%), regulatory shifts (39%), and geopolitical instability (43%). Strong compliance structures and risk mitigation strategies are increasingly vital, particularly in decentralized sectors like Decentralized Finance (DeFi) and Decentralized Autonomous Organizations (DAOs).

Jurisdictions like the BVI are uniquely positioned to support the growth of emerging fintech sectors, offering legal and regulatory flexibility while maintaining compliance and trust.

As decentralized models gain traction, the ability of IFCs to balance innovation with oversight becomes ever more important.

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Chapter One

Pressures and Priorities for Global Fintech Businesses Fintech businesses, particularly those operating in the digital assets space, represent a different generation of global business.

Unlike traditional financial institutions, these businesses are inherently decentralized, agile, and borderless, enabling them to operate across jurisdictions with speed and efficiency.

However, this unique nature also brings distinct pressures and priorities, as they navigate a fast-paced, crossborder environment while striving for growth and innovation.

Priorities for business growth For fintech businesses, cross-border expansion is a cornerstone of their growth strategy. In fact, a significant 94% of global fintech business leaders identify cross-border expansion as either critical or important to their success. This is due to the access to new markets, ability to leverage economies of scale, attract new talent and investment as well as capitalize on global demand for the business’ solution. Placing a spotlight on specific sectors, it comprises all of those leading crypto and virtual asset businesses, 94% for digital asset firms and 83% of crypto and blockchain businesses. This reflects the inherently global nature of these sectors and underscores the importance of operating seamlessly across multiple jurisdictions.

Global fintech businesses who say cross-border expansion is important or critical to growth strategy in the next five years USA

88%

Mexico

93%

Singapore

95%

UK

95%

Hong Kong

96%

China

96%

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To facilitate cross-border expansion, IFCs play a pivotal role, offering businesses access to global markets and capital, favourable regulatory environments, tax efficiency, skilled workforce and strong financial and legal frameworks. Fintechs clearly identify this, with 63% reporting that their organisation, or an entity within it, is already incorporated in an IFC. This figure is even higher for crypto and blockchain firms (67%) and tokenisation businesses (64%), highlighting the strategic importance of these hubs for business growth.

Firms are also looking for hubs that have the right products and services to suit their needs. For a third (33%), developing sustainable finance solutions and Environmental, Social, and Governance (ESG) initiatives is a priority, reflecting the ongoing importance of aligning business practices with global sustainability goals. This is something many IFCs, particularly those based in the Caribbean, are all too aware of given their unique position of being profoundly affected by the impact of climate change but also having the right services and products to facilitate the financial solutions required to tackle it.

In order to drive for growth and international expansion while remaining competitive, efficient and adaptable in an ever-evolving business ecosystem, businesses also identify the need to invest in technology as a critical enabler of growth, innovation and resilience.

When assessing fintech businesses specifically, nearly half (46%) are planning to prioritise tech integration to enhance efficiency over the next two years. By both streamlining operations and automating processes where suitable, businesses are able to keep apace with the increasingly tech-driven workplace.

Philip Graham, Partner, Harneys: “When it comes to tech integration to boost efficiency, I see fintech firms leveraging cloud, blockchain, and AI to drive scalability and compliance in the dynamic digital assets space. Cloud infrastructure enables rapid scaling by offering flexible and costeffective resources, allowing firms to handle surging transaction volumes and global expansion without heavy capital investment. Blockchain, on the other hand, underpins trust and transparency, critical for decentralized operations, while AI enhances efficiency through automation and data-driven insights. These technologies enable fintechs to process high-velocity transactions and expand cross-border seamlessly.

However, compliance must be embedded from the outset to avoid costly rework.”

Eric Flaye, Partner, Conyers, adds: “Increased regulatory and compliance requirements globally have created significant barriers to entry for early-stage players in many sectors, including novel fintech and defi businesses as well as Traditional Finance (tradfi). Great potential and promise lies in the ability for AI and other reg-tech solutions to streamline and automate more routine and process driven functions, thereby allowing businesses to really focus in on acute business-specific risks and to set-up, innovate and scale in a cost-efficient and compliant manner. The BVI, with its innovative regulatory frameworks (including the regulatory sandbox, for example), is especially well-placed to capitalize on such tech-driven efficiency gains, being the “natural home” for many start-up and emerging operators in this space.”

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Global fintech execs identify increasing adoption of new technologies to increase efficiency as top priority investment and strategic focus Crypto and Virtual Asset Exchanges

64%

Tokenisation (Securities, Real Estate, Digital Assets)

59%

Digital assets/virtual assets provider

57%

Wealth Management & Investing

56%

Payments & Transfers

54%

Regtech & Compliance

53%

Crypto & Blockchain

46%

Decentralized Finance (DeFi) Solutions

44%

Crypto and Blockchain-Based Funds or Investment Vehicles

41%

Banking & Neobanking

34%

Insurtech

32%

Forex and CFD Trading Platforms/Brokerage

30%

Lending & Credit

28%

A challenging environment Despite their drive for global growth, fintech and digital assets businesses face a range of challenges as they scale and expand. With advancements in tech also comes a growing emphasis on cybersecurity and the practical challenges of integrating new technology. In fact, when asked what challenges were the most concerning as they look to scale and grow, cybersecurity and fraud prevention emerge as the most pressing concern, with 41% of businesses identifying these as critical issues. This is with good reason. For instance, Chainalysis research1 estimated that $2.2 billion had stolen from crypto platforms by hackers in 2024 alone. The decentralized and digital nature of fintech and digital asset businesses operations makes them particularly vulnerable to cyberattacks, necessitating robust security measures to protect sensitive data and maintain customer trust.

With this in mind, 35% of businesses are aiming to strengthen their defences against cyber threats in the next two years.

1

ttps://www.chainalysis.com/blog/crypto-hacking-stolenh funds-2025/

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“While cybersecurity and fraud risks are universal business concerns, they are particularly acute in the digital asset space, where vulnerabilities can have immediate and far-reaching consequences.

Businesses in this sector should take a proactive approach —prioritising comprehensive compliance frameworks, investing in cybersecurity infrastructure, and staying attuned to jurisdictional developments.

The BVI, with its inherent legal, economic and structural advantages, ready supply of professional expertise, and its progressive and pragmatic, but responsible approach to digital asset regulation, creates and fosters an innovative yet resilient business environment.

The jurisdiction recognizes, in the same way that successful tech companies do, that to strike the right balance between dynamism and diligence creates the best foundation for sustainable growth and successful expansion.”

Michael J. Killourhy Head of BVI Business & Trust Law Group and Deputy Practice Head, Ogier

Integrating emerging technologies is another significant challenge, cited by 35% of businesses. While technology is a key enabler of growth, the rapid pace of innovation can also present a challenge, particularly when balancing the need for scalability with operational stability.

In order for business leaders to invest in areas like technology to maintain an innovative edge they need to have strong access to funding and investment.

Yet, over a quarter (28%) see this as a pressing issue, highlighting the competitive nature of securing capital in a rapidly evolving market. The same number (28%) point to regulatory compliance and evolving policies as a major obstacle to business growth. The fragmented and ever-changing regulatory landscape, particularly in the digital assets space, requires businesses to have the tools available to navigate complex requirements across multiple markets. Within this, Anti-Money Laundering (AML) and Know Your Client (KYC) compliance also remain significant hurdles, with 24% of businesses citing these as primary challenges. The need to meet stringent compliance standards while maintaining a seamless customer experience is a delicate balancing act.

Global fintech businesses are at the forefront of financial innovation. Their agile and borderless nature positions them uniquely to capitalize on emerging opportunities, but it also exposes them to a range of challenges and it’s important that the right structures are in place to help them grow.

“Digital asset, crypto, and tokenisation businesses are in a uniquely positioned ecosystem, driving their focus on cross-border expansion, technological efficiency, and robust cybersecurity. Cross-border expansion is critical because these entities operate on decentralized platforms that transcend geographic boundaries. Global reach enables access to diverse markets, liquidity pools, and user bases, fostering scalability and resilience. The BVI, with its VASP Act, offers a streamlined regulatory framework, enabling firms to establish a compliant base for global operations.

However, regulatory uncertainty and compliance demands, such as AML and KYC, pose significant hurdles. Evolving global standards, like those from FATF, require robust compliance systems which can strain resources and delay market entry. In the BVI, the VASP Act provides clarity, mandating registration and compliance, yet aligning with international norms, offering a stable foundation for growth.”

Philip Graham Partner, Harneys

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Chapter Two

Going Global: Fintech Expansion and Jurisdictional Choice The needs of fintech businesses extend far beyond traditional markets: they require rapid scalability, access to international markets, and the ability to navigate complex regulatory environments with agility.

These demands make the choice of jurisdiction one of the most critical strategic decisions for a business.

Their success often hinges on the ability to operate efficiently across borders.

Incorporation demand: The role of IFCs

IFCs are playing an increasingly pivotal role in facilitating fintech expansion by offering a stable regulatory environment, businessfriendly policies, and access to international markets.

The appeal of incorporating in an IFC lies in the jurisdiction’s ability to offer streamlined processes and access to a global marketplace. Given this, 30% of fintech executives who are not yet incorporated in an IFC are actively considering this route as they scale their businesses. This growing inclination towards IFC incorporation is indicative of the sector’s recognition of the advantages these jurisdictions offer, favourable tax regimes, flexible regulatory frameworks, and efficient incorporation processes that allow businesses to move quickly and effectively.

My business, or an entity within my business, is already incorporated in an IFC

My business isn’t incorporated within an IFC but I would consider it

For fintech businesses, particularly those in the digital assets and blockchain sectors, the decision to incorporate in an IFC is not just a matter of convenience, it’s a strategic necessity. 63% of fintech businesses reported they had already incorporated an entity within an IFC. This trend is more pronounced among companies in the crypto and blockchain sectors, with 67% incorporating within these jurisdictions.

For businesses in the virtual assets space, the figure is slightly lower, albeit still a majority (57%).

63%

6%

My business isn’t incorporated within an IFC but I’m actively looking at it

I wouldn’t consider incorporating my business within an IFC

30% 10

1%

Why businesses choose IFCs When fintech businesses choose to incorporate in IFCs, several key factors guide their decision-making process. The most significant factor, cited by a third (33%), is access to international markets and banking services. Given the cross-border nature of fintech operations, particularly for digital asset firms, having access to a broad range of markets is crucial for growth. This is closely followed by a stable and business-friendly regulatory environment, which 32% of respondents highlight as essential when selecting a jurisdiction. Regulatory stability is key for fintechs as it enables them to plan for long-term growth and navigate any changes in the regulatory environment with confidence.

A further 27% of businesses prioritise jurisdictions with an established professional services network.

This is particularly important for growing fintech businesses that require expertise in legal, tax, and operational matters. Businesses also seek jurisdictions that support sustainability and Environmental, Social, and Governance (ESG) initiatives. With a growing number of companies are prioritising ESG-friendly policies2, incorporating in a jurisdiction that aligns with these values has become increasingly important.

PwC’s 28th Annual Global CEO Survey - https://www.pwc.com/ gx/en/issues/c-suite-insights/ceo-survey.html 2

Priorities for global executives when thinking about where to incorporate their business Access to international markets and banking services

A stable and business-friendly regulatory environment Political and economic stability Sustainability and ESG-friendly policies A well-established professional services network A straightforward and cost-effective incorporation Tax efficiency Jurisdiction with a strong reputation Robust legal framework 0%

Iona Wright Partner, Regulatory & Risk Advisory, Walkers BVI

5%

10%

15%

20%

25%

30%

35%

“Jurisdictions like the BVI have quickly proven themselves to be a launch pad for fintechs looking to scale effectively. As early adopters of digital assets, they have proven to be flexible to the evolving landscape of the technology. The BVI has developed into a financial hub that offers tested responsive regulatory frameworks, access to financial infrastructure and experienced service providers who crucially have the sector fluency and technical depth of knowledge.

“Many would argue it delivers on all fronts. Its flexible legal structures, experienced service ecosystem, and focus on compliance-ready innovation make it an ideal base for businesses looking to grow internationally without compromising governance or risk management.”

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Cost and speed: Maximising operational efficiency One of the driving forces behind choosing an IFC is cost-effectiveness. Over 42% of respondents emphasise the cost-related benefits of incorporating in an IFC, including favourable tax rates, ease of doing business, and reduced operational costs. These factors contribute to an overall lower cost business, enabling fintechs to direct more resources toward growth initiatives rather than being burdened by high regulatory and administrative costs.

Access to international markets is also seen as crucial for 33% of global executives. This is particularly relevant for businesses operating in sectors such as crypto, digital assets, and tokenisation, where cross-border transactions and partnerships are integral to success.

Speed of incorporation is another crucial factor, with 76% of fintech businesses wanting their incorporation process completed within three weeks. The need for speed in fintech expansion cannot be overstated. In an industry characterised by rapid innovation and intense competition, the ability to incorporate and begin operations quickly is a significant advantage and can determine its competitive edge. For those in emerging technologies like blockchain, crypto, and digital assets, time is often of the essence as the number expecting incorporation in under three weeks rises to 79%. They must be able to react to market demands, regulatory changes, and technological advancements without delay. Speed of incorporation ensures that businesses can begin their operations with minimal downtime, accelerating their go-to-market strategies.

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“Incorporation speed affects market entry, investor confidence, competitiveness and global commercial and regulatory positioning.

Brands set customer expectations with speed to market and efficiency builds brand loyalty.

Speed provides more certainty of access to capital and infrastructure, demonstrates organisational readiness, helps to ascertain legitimacy and builds client trust in the product. It also continues to build trust in the BVI as a leading offshore incorporations jurisdiction. Speed should be balanced with onboarding/compliance, legal and operational considerations. Fintechs should always obtain the necessary legal advice to ensure jurisdictional fit.”

Ayana Hull Head of Private Wealth and Regulatory - BVI at Harneys “In no other sector is speed to market more important. Significant delays can (and often do) kill off deals. The BVI has a very compelling market offering and strong competitive advantage in this regard, but speed to launch must always be tempered with other critical considerations such as regulatory compliance, contractual and other risk mitigation, and ensuring that sufficient structural flexibility is baked-in upfront to enable innovation, scaling and adaptation in the future.”

Eric Flaye Partner, Conyers

Balancing Speed with Strategic Considerations The decision to incorporate within an IFC is ultimately a balancing act. Fintech businesses must weigh the need for speed with the long-term considerations of scalability, regulatory compliance, and access to markets. Jurisdictions like the BVI are particularly attractive because they offer both rapid incorporation and a stable regulatory environment, which helps businesses scale efficiently across borders. As the fintech sector continues to evolve, the role of IFCs in providing the foundation for global expansion will only become more critical.

Iona Wright, Partner, Regulatory & Risk Advisory, Walkers BVI: “Speed must be balanced with foresight. When setting up, fintechs must also consider regulatory clarity, local infrastructure, and access to banking and legal services: can a jurisdiction prove the basis for a startup to grow and thrive?

“Innovative jurisdictions like the BVI are adapting to this dual need for speed and stability. It’s offering fintech-ready frameworks for digital assets, providing guidance on token classification, enabling decentralized autonomous organizations (DAO) structures, and introducing licensing regimes that are clear yet flexible. These jurisdictions aren’t just reducing barriers to entry, they’re actively designing environments where innovation can scale responsibly.

“What we typically see is there is often a three-month window to bring a project from ideation to formation this is often determined by investor timelines and dynamic market cycles.

Clients flock to the BVI due to its fast and modern incorporation process, legal certainty, and importantly a strong tech focused professional service culture.

“The BVI is an important node in the web3 ecosystem and has been working deeply in the space for over a decade.

With its broad-minded regulatory approach, the BVI’s VASP legislation is set to pragmatically evolve, balancing international standards and the need to foster and facilitate innovation.”

Ronan Kuczaj Founder & CEO, DLT Solutions

“In practicality, this means access to markets, cross-border regulatory recognition, a robust professional services network, and a willingness to evolve with the industry. For fintechs, the ideal jurisdiction is one that moves fast, but also moves with them.”

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Chapter Three

Trust, Risk and the Regulation Equation

Businesses in the sector are managing their global growth against a complex and rapidly changing macroeconomic and geopolitical environment.

The past year has seen the most significant trade war in decades emerge, an increasing move towards economic nationalism and ongoing geopolitical tensions.

At the same time, through the advent of regulation such as MiCAR in the EU3 and an evolving approach in the US, we are seeing a fragmented approach to regulation across jurisdictions. This is having a profound impact on the way businesses conduct themselves. https://www.esma.europa.eu/esmas-activities/digital-financeand-innovation/markets-crypto-assets-regulation-mica 3

Geopolitical Trends and Economic Pressures Geopolitical shifts are placing significant influence on fintech businesses, with over two fifths (43%) identifying economic sanctions and access to finance as the trends having the most profound impact on their businesses. This concern is particularly acute in jurisdictions like Hong Kong (53%) and Singapore (47%), where businesses are more exposed to international trade dynamics and financial or trade restrictions. By contrast, only 28% of fintech leaders in Mexico cite these issues as a major concern. These businesses also have a right to be concerned. The ongoing trade wars and changing economic sanctions are creating barriers to cross-border operations, in some cases limiting access to global capital markets and increasing the cost of doing business. For fintech firms, which often rely on international partnerships and funding, these pressures underscore the importance of diversifying operations and incorporating within markets which are more resilient against external shocks.

Geopolitical trends having the most profound impact on businesses, according to global fintech leaders Economic sanctions and access to finance

43%

Regulatory changes and compliance

39%

Growing threat of cyber attacks Political instability and conflict

Trade tensions and protectionism Supply chain vulnerabilities

Climate change and environmental policies

Impact of ageing populations on labour market Nationalism and social movements 14

40% 33% 32% 27% 26% 23% 18%

Regulatory Challenges and Strategic Decision-Making Close to two-fifths of global businesses (39%) also cited regulatory changes and compliance as a geopolitical trend having a significant impact on their business. Regulation remains a critical factor influencing where fintech businesses choose to incorporate and grow. When considering regulatory challenges, a third (32%) of fintech leaders highlight the importance of a clear licensing framework for fintech and virtual assets. This reflects the need for regulatory certainty, particularly in emerging sectors like cryptocurrency and blockchain, where unclear or inconsistent rules can stifle innovation.

Taxation is another key consideration, with 34% of businesses citing high tax burdens—such as unfavourable corporate tax rates, double taxation issues, or unexpected tax law changes as a significant factor. Conversely, 29% of fintech leaders prioritise favourable tax policies when evaluating jurisdictions, highlighting the delicate balance between managing costs and ensuring compliance.

As a tax-neutral jurisdiction, the BVI doesn’t impose additional taxes on transactions or economic activity using BVI structures, though businesses are still required to pay taxes in the jurisdictions where they operate. This neutrality, combined with a flexible and strong corporate structure, offers significant advantages.

When it comes to the strategic decision of where to incorporate a business, privacy and asset protection laws are also a priority, with 29% of businesses valuing strong legal safeguards for their operations. Meanwhile, 24% of fintech leaders emphasise the importance of a business-friendly legal framework, helping to reduce operational complexity and allow the businesses to foster innovation.

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Michael J. Killourhy Head of BVI Business & Trust Law Group and Deputy Practice Head, Ogier

“Regulatory certainty is a critical driver for business growth and jurisdictional attractiveness. Predictable licensing regimes, clear rule enforcement, and mechanisms for cross-border recognition enable companies to make informed decisions and plan long-term.

In today’s environment, economic sanctions and sudden policy shifts - particularly those targeting major economies like China have elevated the importance of choosing jurisdictions with stable legal frameworks and neutral political postures.

This is especially relevant for companies concerned about the evolving global landscape and the heightened risk of being caught by international sanctions or compliance mandates. For fintech firms, the importance of certainty in tax law, licensing, and regulatory enforcement cannot be overstated. It allows them to accurately assess risks, project operational costs, and invest in scalable business strategies without fear of abrupt regulatory changes undermining their business model.”

Eric Flaye Partner, Conyers

“Regulatory uncertainty, in terms of future potential developments, is par for the course in this sector. Sophisticated industry players are generally understanding of this and willing to accept a degree of related disruption risk (in not viewing any particular fintech, crypto or defi operation as necessarily evergreen in a given jurisdiction). The real consideration when setting-up then becomes one of comparative advantage in terms of relative certainty, stability and reliability.

The BVI is often the preferred offshore jurisdiction by these metrics, not only for its attractive regulatory environment but also the flexibility of its company and partnership laws (which enable entities to be formed, structured, capitalized, operated, re-organised and ultimately exited very efficiently).”

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Scaling Amid Compliance Pressures As fintech businesses scale, navigating complex and ever-changing regulations is a key issue for over a quarter (28%) of executives. These requirements are particularly burdensome for fintech firms operating across multiple markets, where differing standards and governance structures can create inefficiencies and increase costs.

To address these challenges, fintech businesses are investing in robust compliance frameworks and leveraging technology to streamline processes.

For example, Regulatory Technology (RegTech) solutions, the application of emerging technology to improve the way businesses manage regulatory compliance, are helping firms automate AML/KYC checks, monitor transactions for suspicious activity, and ensure adherence to local and international regulations.

Trust is the cornerstone of any successful fintech business. Customers and clients expect transparency, security, and ethical practices, particularly in sectors like digital payments and virtual assets where trust deficits can undermine adoption. By prioritising regulatory compliance amongst the ever-changing economic backdrop, fintech businesses can build and maintain trust with their stakeholders.

Ayana Hull, Head of Private Wealth and Regulatory - BVI at Harneys: “Fintech firms offer non-traditional financial services such as DeFi and Peer-to-Peer (P2P) lending, which do not fit squarely into legacy regulatory structures. It is therefore difficult for fintech businesses to comply with a traditional AML/KYC framework, which are designed for centralized banking and finance.

Traditional KYC assumes that a centralized party can verify identity, and this does not work for DeFi as users interact anonymously through their wallets.”

Philip Graham, Partner, Harneys, adds: “AML and KYC compliance has evolved from rigid, box-ticking exercises to dynamic, tech-driven solutions critical for fintech and digital asset firms.

Traditional AML frameworks are often slow, manual, and ill-suited to the decentralized, high-velocity nature of digital assets. AI-based risk scoring, smart contract analysis, and real-time monitoring are transforming compliance, addressing the 28% of firms prioritizing regulatory challenges. These tools enable proactive risk mitigation, crucial for the many concerned with cybersecurity and fraud.

“Jurisdictions like the BVI enable smarter compliance through regulatory sandboxes, allowing firms to test AI and blockchain solutions while ensuring adherence to AML and KYC requirements. However, rigid jurisdictions with outdated regulations inhibit adoption, forcing reliance on manual processes. By fostering innovation-friendly policies and professional services, the BVI empowers fintechs to integrate advanced tools, ensuring compliance that scales globally while effectively mitigating risks in a fast-evolving landscape.”

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Chapter Four

Feeding rather than stifling innovation: Fintech, DeFi, and DAOs Blockchain/Distributed Ledger Technology as a core underlying technology for global fintech leaders’ businesses:

44%

Global Fintech leaders

54%

Early-stage startup leaders

49%

Mature incumbents

The rise of decentralized finance (DeFi) and decentralized autonomous organizations (DAOs) marks a transformative shift in the financial services sector. These technologies remove traditional intermediaries and automate financial processes through blockchain and smart contracts unlocking new possibilities for participation, transparency, and efficiency.

Within the study, 44% of global firms reported that blockchain or distributed ledger technology (DLT) is core to their business. This figure rises to 54% among early-stage startups and remains high across leading jurisdictions such as the UK (45%), Hong Kong (41%), Singapore (41%), and China (43%).

As these decentralized models grow more sophisticated, they present unique challenges for businesses and regulators alike. IFCs have an essential role in helping firms navigate this transition, by offering regulatory clarity, legal innovation, and the institutional infrastructure necessary for decentralized technologies to scale responsibly.

“Reputation has become paramount in the conversation on regulatory compliance. Businesses increasingly recognise the importance of well-regulated jurisdictions in attracting institutional capital and mitigating reputational risks, particularly following market disruptions.

“The “race to the bottom” is over: successful businesses must prioritise credibility, reputation and regulatory alignment from day one to scale sustainably. As larger, institutional market players enter the digital assets sector, we’re seeing DeFi structures look to future proof their regulatory compliance to a gold standard that will stand up to institutional scrutiny and expectations.

“The question is not if regulators will act, they have shown they want to work with businesses to find answers.

It’s not about forcing DeFi to rebuild entirely, but about crafting regulatory architectures that are compatible with blockchain-native structures.”

Iona Wright Partner, Regulatory & Risk Advisory, Walkers BVI 18

DeFi and smart contract will be the trend with the biggest impact on the fintech industry in the next five years.

27%

China

15%

11%

Mexico

8%

USA

Singapore

18% UK

28%

Hong Kong

Emerging trends in fintech: The role of IFCs As fintech leaders increasingly look to the future, it’s important to understand which of these global trends they expect to have the greatest impact over the next five years. Reducing friction in the financial system and cross-border, and decentralisation loom large. Over a quarter (26%) are expecting open banking and API-driven innovation to have a significant impact on the fintech industry over the next five years.

Twenty-three percent (23%) are looking towards cross-border payments and real-time settlement while 18% of leaders selected DeFi and smart contracts as a dominant trend.

The prominence of DeFi and smart contracts reflects a growing global consensus that decentralized models will shape the next era of financial innovation.

Jurisdictions such as the BVI are positioning themselves to support this shift, offering purposebuilt legislation, licensing regimes, and regulatory sandboxes that accommodate the specific needs of decentralized systems while providing regulatory credibility.

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DeFi, DAOs, and the regulatory challenge DeFi platforms replace central institutions with code-based protocols. While this removes inefficiencies, it also raises serious compliance and governance concerns. Our data shows that 63% of leaders cite “lack of regulatory clarity” as one of the top barriers to launching or scaling fintech offerings.

Despite limited guidance in some jurisdictions, 57% of respondents cited they are already implementing voluntary KYC/AML procedures on DeFi-related activities. This trend indicates an industry-led shift toward hybrid compliance models, blending on-chain transparency with off-chain identity checks.

Hong Kong’s enhancements to its licensing regime for virtual asset trading platforms4 and the BVI’s VASP act are both examples of how IFCs are responding to this challenge. These frameworks allow decentralized platforms to register as regulated entities, striking a balance between innovation and legal accountability.

On the other hand, DAOs are part of the crypto ecosystem and are often built on blockchain technology. It uses token-based governance to coordinate decisionmaking across globally distributed participants.

However, this model introduces complex questions around accountability, liability, and legal status.

“Having seen the very first DAO launch, I have since then witnessed DAOs transitioning from speculative, loosely organized collectives to structured, compliant entities, driven by the need for regulatory alignment and operational stability. Initially experimental, DAOs now integrate legal wrappers to address compliance challenges and governance demands in the digital assets space. Jurisdictions like the BVI provide trusted frameworks, enabling DAOs to operate globally while meeting AML/KYC and cybersecurity requirements.

“Effective legal structures offer flexibility and fiduciary accountability. These wrappers ensure DAOs comply with global standards while maintaining decentralized governance through smart contracts. The BVI’s regulatory sandbox supports testing of token governance models, critical for firms focused on DeFi, ensuring compliance without stifling innovation.”

Philip Graham Partner, Harneys 20

Although 44% of respondents report that blockchain/ DLT is core to their business, only 31% say they have a fully formed legal entity governing on-chain activities.

Even fewer, just 26%, believe that current IFC legal structures adequately cover the governance risks posed by DAOs. To address this gap, jurisdictions such as the BVI have been proactive in addressing the legal implications of DAOs, especially concerning their assets and liabilities in the context of insolvency.

The BVI does not have specific legislation exclusively addressing DAOs, however existing laws and legal principles can be applied to assess the treatment of DAO assets and liabilities5. As DAO governance evolves from experimental to institutional, IFCs that can formalize these models, while retaining their decentralized nature, will play a foundational role in shaping the Web3 economy.

Michael J. Killourhy, Head of BVI Business & Trust Law Group and Deputy Practice Head, Ogier: “Token issuance has become increasingly sophisticated as projects seek to navigate complex and evolving legal landscapes. Instruments such as the Simple Agreement for Future Tokens (SAFTs) and Simple Agreement for Future Equity (SAFEs) have provided flexibility for earlystage fundraising, allowing projects to defer the actual issuance of tokens or equity until regulatory clarity or business milestones are met. While these instruments continue to be widely used, their viability varies across jurisdictions: regulators in some major markets, like the United States, have scrutinised SAFTs under securities laws, prompting issuers to seek alternative structures or more favourable jurisdictions to conduct their offerings a phenomenon known as jurisdictional arbitrage.

“The experience of market participants has underscored the critical importance of careful structuring and regulatory engagement from the outset. Jurisdictions which offer clear frameworks for token issuance and investor protection, like the BVI, are increasingly preferred by serious projects looking for longevity and credibility. The legal outlook in the BVI is particularly conducive to crypto investor with several recent significant cases demonstrating the BVI Courts’ willingness to recognise and protect the interests of investors in digital assets.”

FC extends swift licensing process to all new virtual asset trading platform applicants S https://hongkong.dentons.com/en/insights/articles/2025/january/27/hong-kongevolving-regulatory-regime-for-virtual-assets 5 BVI treatment of DAOs in insolvency - https://www.loebsmith.com/insight/bvi-bvitreatment-of-daos-in-insolvencybvi/ 4

Conclusion

As a new generation of global financial businesses emerge and scale, IFCs are not just passive observers; they are actively enabling the growth of the sector.

Primary reasons firms choose to locate in a particular jurisdiction

32%

29%

24%

Clear fintech and virtual asset licensing framework

Favourable tax policies

Regulatory flexibility and business-friendly legal framework

By identifying the priorities and opportunities for fintech businesses, the opportunity for IFCs to shape global best practices by developing bespoke, flexible frameworks for governance is clearer than ever. By offering adaptable legal vehicles, forwardlooking compliance models, and supportive regulatory

environments, IFCs can empower the next generation of financial infrastructure, without compromising on trust, transparency, or investor protection. As they meet the needs of a rapidly evolving and scaling sector, their role in the global financial services sector, and global economy, is likely to increase.

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Afterword

“Placing a spotlight on the pressure points and “One of the BVI’s key strengths lies in its straightforward strategic priorities for global fintechs highlights to me and flexible processes for establishing and operating the significant opportunity available to these businesses. businesses. This adaptability caters to a wide range of While many are already incorporated in an IFC, those business needs, ensuring that companies can continue who are not are faced with a stream of reasons to look to thrive in an ever-changing global landscape. This has beyond their current market and take advantage of a been underpinned by the Virtual Service Providers Act jurisdiction that can support them at every stage of (VASP Act), which set a benchmark for regulating virtual their lifecycle. Access to international markets, a stable asset service providers. In an era of rapid technological and business-friendly environment and political and advancement and global interconnectedness, the BVI economic stability remain core considerations for continues to distinguish itself as a forward-thinking these businesses. jurisdiction, offering unparalleled support to businesses navigating the complexities of the modern economy.”

“The British Virgin Islands offers a distinctive and compelling proposition to global businesses, institutions, and private individuals. As a full-service jurisdiction, the comprehensive approach, combined Elise Donovan with a commitment to innovation and efficiency, CEO, BVI Finance has cemented the BVI’s reputation as a trusted partner for businesses worldwide.

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Methodology

Acknowledgments

The research was conducted by Censuswide, among a sample of 451 business leaders (director+) working in fintech, aged 18+ across the USA, UK, Mexico, Singapore, Hong Kong and China.

Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles.

Censuswide is also a member of the British Polling Council.

We would like to thank BVI industry experts Eric Flaye, Philip Graham, Ayana Hull, Michael J. Killourhy, Ronan Kuczaj and Iona Wright - who have provided their thoughtful insights within this report.

We like to offer further thanks to MHP Group who contributed to the analysis, drafting and design of the report.

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Contact Us BVI Finance 3rd Floor, Cutlass Tower, Road Town Tortola, British Virgin Islands VG1110 info@bvifinance.vg +1 (284) 852-1957 www.bvifinance.vg ©2025 BVI Finance All Rights Reserved

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