21/04/22

White paper outlines future of Bahamas in digital assets sector.

As published on thenassauguardian.com, Thursday 21 April, 2022.

The government will this year start enabling the access of Bahamians to digital assets using Bahamian dollars, and enable the payment of taxes using digital assets, Prime Minister Philip Davis announced yesterday as he tabled a policy white paper on the future of $3 trillion digital of digital assets global market in The Bahamas.

The white paper also promised the establishment of a digital advisory panel (DPA) tasked with reviewing evolving developments in the sector, as well as a digital asset policy committee in 2022.

Speaking to what he called a transformative emerging market, Davis said The Bahamas and Bahamians should be at the vanguard of this new frontier.

“My government’s initial success in attracting significant digital asset businesses is only the beginning. We have a vision to transform The Bahamas into the leading digital asset hub in the Caribbean, and a global leader in the progressive regulation of businesses in this profoundly innovative space,” he said in the House of Assembly yesterday.

The Digital Assets and Registered Exchange Bill (DARE Bill) was passed in 2020, paving the way for the issuance and trading of cryptocurrency in The Bahamas.

This new digital asset policy framework is a guidance, developed with the Securities Commission of The Bahamas (SCB) and The Central Bank of The Bahamas for now until 2026.

The white paper said under this framework it is expected that there will be substantial growth in the sector by 2025. The nine-point policy adjectives in the white paper include exploring new opportunities in decentralized finance (DeFi), non-fungible tokens (NFTs), stablecoins and asset-referenced tokens; improving The Bahamas’ attractiveness as a well-regulated jurisdiction for digital assets management and expanding the current legislative framework.

“To encourage innovation in the fintech space and identify emerging technologies that would help maintain The Bahamas’ competitive advantage; to explore linkages between The Bahamas’ existing financial services toolkit (i.e. corporate and fiduciary services) and to facilitate continued innovation in the international financial services sector; to develop the skills and expertise necessary to fill jobs created in the Bahamian digital assets sector; to work with The Central Bank of The Bahamas to ensure that polices are adjusted and clarified to enable Bahamians to access digital assets in Bahamian dollars,” the prime minister said yesterday of the policy objectives.

“To build capacity and expand the resources of the SCB in order to support and enhance its role as the pre-eminent digital assets regulator, and to enable it to become a global center of excellence in the pragmatic, risk-adjusted regulation of digital assets and digital asset businesses; and to provide sustainable funding for our digital asset policies, initiatives, and programs.”

He continued, “Taken together, the fulfilment of these objectives will encourage the growth of an exciting new industry while protecting consumers, businesses and investors. They will also offer safeguards against systemic risks which may emerge. They will also help to promote and defend the competitiveness of The Bahamas and offer new opportunities for Bahamians and international investors alike. We wish for our country and our people to be seen as innovators, to stand among the first and best as a great place to do business.”

The prime minister added that an integral part of his administration’s policy involves extensive education in digital assets to ensure Bahamians are well-versed and properly trained in market intricacies.

“We propose to expand the range of sector-specific, academic, professional and vocational opportunities in education. This is vital to ensure that Bahamians are well-placed and best placed to secure positions in this exciting new industry. We will promote closest collaboration between the University of The Bahamas, the private sector, and the regulators, to develop crypto-asset courses, to both certificate and degree level,” Davis said.

“I trust the whole House and the Bahamian people will share my fervent desire that the widest possible number of Bahamians benefit from this opportunity. In part seven of the white paper, we set out how we wish Bahamians to be able to access digital assets in Bahamian dollars and encourage greater use of Sand Dollars. Part eight seeks to integrate our digital asset policy with our wider policy around climate change. We propose to introduce incentives for digital assets that prioritize more energy-efficient digital use, to help mitigate the effects of greenhouse gases. We will also explore the feasibility of establishing a system of carbon credits and the establishment of a Caribbean carbon market. This could potentially employ distributed bed ledger or blockchain technology and operate within The Bahamas’ digital asset regime.”

The white paper was published ahead of the first major cryptocurrency conference to held in The Bahamas, attracting former UK Prime Minister Tony Blair, former US President Bill Clinton, and seven-time Super Bowl Champion Tom Brady.

The invitation only conference is being presented next week by FTX and SALT.

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