As published on tribune242.com, Thursday 19 May, 2022.
The Bahamas will likely have “to fight” the European Union (EU) and Organisation for Economic Co-Operation and Development (OECD) to preserve its digital assets leadership, the Opposition’s leader warned yesterday.
Michael Pintard, the Marco City MP and former Minnis administration Cabinet minister, told the House of Assembly that high-tax European states and their parliaments would like nothing better than “to clamp down” on The Bahamas’ ambitions to establish itself as a Fintech (financial technology) hub for crypto currencies, blockchain and non-fungible tokens (NFTs).
Speaking as the House debated reforms to the Digital Assets and Registered Exchanges Act, which will expand the Securities Commission’s enforcement and sanctions powers to cover unlicensed and unregistered operators, he added that the Free National Movement (FNM) was “prepared to stand with the Government in this fight” and back any necessary response.
Warning that The Bahamas will face similar attacks to those that have undermined the competitiveness of its traditional financial services sector, Mr Pintard said: “The problem that we are likely to run into, in Europe, parliaments are quite worried about what we are doing here.”
While the European Commission has to-date voiced no concerns over The Bahamas’ digital assets drive, the Opposition leader said politicians in that region would likely view the country’s developing industry as a potential haven for operators who do “not want to follow the law”.
“There are those in Europe looking at our jurisdiction and ways to clamp down on what The Bahamas is doing now,” he said. “Our jurisdiction has unfortunately been unfairly treated by the OECD and some of the parliaments in Europe, and some of the things we we were faced with in financial services we are likely to be faced with in digital assets.
“We have to fight that same fight with digital assets because the parliaments are looking out for their interests, not our interests. We are prepared to stand with the Government in this fight. When we pursue innovative things that position us as leaders in the global community, we do not permit them to shut down any opportunities where we can succeed.”
Kwasi Thompson, former minister of state for finance, said The Bahamas needed to focus on developing the necessary workforce for a digital assets industry. “We need 10,000 [software] developers, we need 10,000 coders if we’re really going to make an impact in this industry,” he added.
The Government’s ‘white paper’, entitled The Future of Digital Assets in The Bahamas, seeks to balance signalling to crypto, blockchain and non-fungible token (NFT) providers that this nation is ‘open for business’ with the necessary risk-based regulatory approach to protect the country’s reputation and the interests of investors/consumers.
Indicating The Bahamas’ eagerness to attract blue-chip operators of the same calibre as FTX Digital Markets, one of the world’s largest crypto currency exchanges, who wish to operate in a compliant environment, the paper lists multiple broad-brush goals and policy objectives that the Government wishes to achieve in building a sustainable digital assets sector.
Pledging to work with the Central Bank and private sector to enable Bahamians to invest in digital assets using Bahamian dollars, and thus overcome a key complaint of many locals, the ‘white paper’ also promised to this year establish a Digital Policy Committee and Digital Advisory Panel to advise the Government on how best it can facilitate the sector’s growth via legislative and policy initiatives.
The Committee will be headed by the Prime Minister, be charged with overseeing the attainment of the Government’s digital policy objectives, while the Panel will feature industry and regulatory executives functioning in a capacity that will see them advise the former.
And, perhaps critically, the ‘white paper’ also focused on enabling Bahamian entrepreneurs and workers to exploit digital assets opportunities by providing them with the necessary skills upgrades. It calls for a partnership between the University of The Bahamas (UoB), Securities Commission and private sector to develop crypto asset-related courses, certifications and degrees.
To help finance this, the Government says it is mulling whether to impose a “development and training” levy - sum and mechanism not specified - on “the largest digital asset businesses” to ensure The Bahamas can provide the qualified, well-trained workforce that can help attract other operators to domicile in this nation.