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Crypto Exchange Plan To ‘Revolutionise’ Bisx

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas International Securities Exchange’s (BISX) plans for a cryptocurrency and digital securities trading platform will “revolutionise our jurisdiction”, its top executive said yesterday.

Keith Davies told Tribune Business that BISX was “concluding the necessary steps” to establish such an exchange in The Bahamas, and intended to make “a formal announcement” on its intentions by end-March 2019.

Declining to provide details as the specifics are still being finalised, along with regulatory clearance, he said BISX will largely steer clear of initial coin offerings (ICOs) and Bitcoin-type cryptocurrencies given current global volatility in this area.

Instead, Mr Davies indicated that it will focus on so-called “tokenised securities” listings and trading. These digitised/electronic instruments effectively replicate ordinary shares issued by blue chip companies such as Amazon, with holders enjoying the same voting and other rights.

The price of tokenised securities adjusts in exactly the same way as stocks listed on a traditional exchange, but with the share register now maintained by blockchain technology.

“We’re concluding the steps required to take the next step towards the development of a cryptocurrency and tokenised securities listing exchange, and will be making an announcement shortly,” Mr Davies told Tribune Business. “We’re targeting the first quarter, the end of March, in terms of making an announcement.

“We will be able to reach the globe in terms of communications and securities offerings through this platform. It’s a quantum leap for us. We expect, if and when we’re able to take this positive step, this will have the effect of revolutionising our stock exchange and our jurisdiction.”

Tribune Business understands that BISX’s proposed cryptocurrency and tokenised securities exchange will be kept separate and apart from its current domestic market platform, which facilitates equity, debt and mutual fund listings.

It is also thought that BISX’s plans are relatively well advanced, although clearance from both the Securities Commission and the Government will be required to transform its ambitions into reality.

With cryptocurrency still largely viewed as a high-risk, “Wild Wild West” sector by much of the global financial services industry, Mr Davies said the Bahamian stock exchange was targeting its initial focus towards a less volatile niche.

“The first step is not necessarily initial coin offerings (ICOs) but more established cryptocurrency and tokenised securities,” he told Tribune Business, adding that BISX planned to “ultimately aim for the stars if we’re able to do the things we want to do”.

While conscious of the risk involved, BISX stands to potentially develop a new, valuable earnings stream while diversifying away from its current reliance on both the domestic Bahamian capital markets and international funds industry if it gets its cryptocurrency platform right.

Holland Grant, BISX’s chief operating officer, described “tokenised securities” as “broadly mimicking” traditional debt and equity securities.

“You’re taking a share of General Electric; that’s an equity token, with the share register on the blockchain,” he added. “The behaviour is similar to an ordinary share; it has a price based on the company’s economic performance and is tied to its trading performance. You get the same rights, voting rights, as ordinary shareholders.”

Mr Davies described blockchain technology as “the window to the future” where financial technology (Fintech) is concerned. “If you look at the space from where it started to where it is now, the use of technology to facilitate interaction between companies, consumers and investors is incredible,” he added.

“It’s the future of where the market is going in terms of what we refer to as programmable securities. It allows us to push more information into a single instrument, a security, than you had before. From a regulatory standpoint it improves our ability to do our job, from an investor standpoint it improves the level of confidence and accessibility to the market, and from the issuer standpoint it gives you access to a wider audience without an increase in costs.”

BISX and Mr Davies first confirmed they were preparing to “jump in” on cryptocurrency in January 2018, after the issue was raised at the Bahamas Business Outlook conference by well-known “eye doctor”, Dr Johnathan Rodgers.

However, BISX has remained true to Mr Davies’s pledge that it would move carefully to meet all necessary regulatory requirements, and be cautious not to embrace a technology that took it down a dead-end road in terms of reputation and future business.

It is especially aware that it is moving into an unregulated area, as confirmed by the Central Bank of The Bahamas. The regulator, responding to a rash of companies promoting ICOs and crypto/blockchain solutions, last year moved to warn Bahamians of the risk involved in investing in a still-evolving industry.

“The Central Bank of The Bahamas wishes to advise the public that no licence has been granted to crypto currency operators by the Bank or any other financial regulator to offer digital currency, or to provide such services such as cryptocurrency exchanges, crypto loans or crypto and fiat processing in or from within The Bahamas,” the Central Bank warned.

“Persons investing in such products and services do so at their own risk.” The Central Bank added that crypto/digital currencies were not legal tender in The Bahamas, are not issued or backed by it, and are not legal foreign currency either.

“The Central Bank does not regulate or supervise virtual currencies, nor has the Bank authorised any entity to operate a virtual currency platform,” the Central Bank reiterated. “The public is further advised to seek professional advice with respect to matters regarding savings and investments from legitimate and licensed financial institutions.”

Comments

BahamaPundit 2 months, 3 weeks ago

Crypto is already out of fashion. It's a scam. The world has already moved on to the next big thing.

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John 2 months, 3 weeks ago

The Central Bank of The Bahamas wishes to advise the public that no licence has been granted to crypto currency operators by the Bank or any other financial regulator to offer digital currency, or to provide such services such as cryptocurrency exchanges, crypto loans or crypto and fiat processing in or from within The Bahamas,” the Central Bank warned.

“Persons investing in such products and services do so at their own risk.” The Central Bank added that crypto/digital currencies were not legal tender in The Bahamas, are not issued or backed by it, and are not legal foreign currency either.

Well isn't this the criteria that makes Crypto a currency? the ability to do transactions by passing commercial and central banks? And also suspect to fraud and persons getting ripped off? And now there are these letters floating around threatening to blackmail persons if then dont deposit BitCoin into a certain account>

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ThisIsOurs 2 months, 3 weeks ago

"*said BISX will largely steer clear of initial coin offerings (ICOs) and Bitcoin-type cryptocurrencies given current global volatility in this area.

Instead, Mr Davies indicated that it will focus on so-called “tokenised securities” listings and trading. These digitised/electronic instruments effectively replicate ordinary shares issued by blue chip companies such as Amazon, with holders enjoying the same voting and other rights.

The price of tokenised securities adjusts in exactly the same way as stocks listed on a traditional exchange, but with the share register now maintained by blockchain technology.*"

This isn't Bitcoin currency that has nothing behind it where the value is entirely based on how many people want to hold it.. If I didn't misunderstand him, they're going to issue these currencies on companies that are already trading. So the currency is backed by "something", just as a share certificate gives you certain ownership and monetary rights. They're proposing a system where your "share" ownership is recorded by a block chain.

To be honest I think people are force feeding this blockchain thing. They're applying it to everything because it sounds more sexy to do so. I haven't yet seen an application yet that's made some tremendous difference or offered a solution that couldn't be gotten by some other equally efficient and secure means.

And by secure I don't mean unbreakable ,just much more difficult to break. For example, I don't know how much good blockchain will do on a physical asset if say that asset can be physically removed by a bad actor from a museum. But maybe I'm missing it....been wrong too many times.

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Gotoutintime 2 months, 3 weeks ago

Oh Wow---When can I give you my money and how much do you need??

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realitycheck242 2 months, 2 weeks ago

“tokenised securities” listings and trading. These digitised/electronic instruments effectively replicate ordinary shares issued by blue chip companies such as Amazon, with holders enjoying the same voting and other rights. These are the key words to this whole article. This some valid stuff. The question is will BISX be able to provide a secure environment for these securties and will the central bank and the government implement the necessary legislation for regulation of this type of securities .

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ThisIsOurs 2 months, 2 weeks ago

Maybe I've missed It, this sounds like its just a different way of recording ownership. But there are already existing methods of securely recording ownership. To me a thing that requires heavy investment in time and resources shouldn't be done unless the theory behind it promises a dramatically transformative thing. (And "transformative" doesn't have to be complex) The CEO of Apple Tim Cook says, they get alot of good ideas, but they only spend time on the great ones. But again maybe I've missed it I'm still waiting on the invention that makes some transformative use of block chain. I don't think we've seen it yet...But I don't doubt that it may come

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BahamaPundit 2 months, 2 weeks ago

They may be trying to implement a new type of bearer share, so companies can be transferred simply using tokens in order to hide ownership. Of course, this would just lead to blacklisting.

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banker 2 months, 2 weeks ago

Sigh. He said this shiite last year, except he was within weeks of launching ICO's on BISX. Methinks this is his "Look busy, Jesus is coming" pronouncement that he puts out every few months to justify his job of sucking at the trough.

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