The rate at which the various island states are embracing FinTech varies. However, many small jurisdictions and their governments are sitting on what could be classified as a hotbed of opportunity.
Weighing up the advantages and the risks of adopting and regulating DLT is Barbados. Barbados is already home to Bitt Inc., one of the first and most secure international exchange and wallet operations. In 2016, Bitt created a digital Barbadian dollar, a virtual currency pegged to the value of its real-world counterpart. Today, Bitt is working with 12 regional governments to develop a pan-Caribbean settlement network. These developments come at an opportune time given the current trend of de-risking in the region.
More recently, Polymath Inc., a Toronto based Initial Coin Offering (ICO) startup has announced its partnership with the Barbados Stock Exchange in a bid to launch a 'world first' regulation-compliant security token fund. Polymath has built a system that makes a whitelist of accounts that have gone through investor accreditation, know-your-customer and anti-money laundering checks.
The Value of Good (and Flexible) Regulation
The benefits of adopting progressive and flexible regulation for Barbados are potentially very significant in terms of the additional revenue it can help generate and the opportunities for employment it can create.
DLT offers Barbados the opportunity to significantly enhance and improve the way in which the government transacts its business, on a macro and micro-economic scale, improving both the cost and ease of doing business in the jurisdiction.
Effective regulation that meets international standards would serve to attract legitimate business, while protecting Barbados' reputation. To ignore DLT would be, in proverbial terms, ‘to miss the boat’.
On 25 May 2018 Barbados elected a new government. This government, in outlining its parliamentary programme in the Throne Speech delivered on 5 June 2018, stated that it “will use technology to improve the quality and speed of the delivery of a wide range of high-demand government services and will facilitate payments for their provision.” The government added that it would “support and leverage new technologies, such as blockchain, wherever such technologies have the proven ability to boost foreign reserves, democratise the economy, create economic empowerment for Barbadians and build wealth.” It was also announced that a sandbox regime for regulation would be created in order to facilitate startups and encourage and support innovation in the jurisdiction.
It is my opinion that the Government of Barbados should also act with haste and set up a task-force or a special committee in conjunction with agencies such as the Barbados International Business Association and other relevant professional organisations to prepare a report with a view to implementing an appropriate regulatory and legal framework that continues the facilitation of DLT-related business.
Barry Gale QC
Barry Gale QC is an attorney at Hastings Attorneys who specialises in conveyancing, mortgages, incorporations, partnerships, corporate acquisitions, mergers, joint ventures, corporate finance and public offerings.