By NEIL HARTNELL
Tribune Business Editor
The Government’s newly-released digital assets policy proposes employing blockchain technology to help record the trading of Bahamian carbon assets and the activities of a wider “Caribbean market”.
The so-called ‘white paper’, which was released yesterday entitled The Future of Digital Assets in The Bahamas, seeks to marry a potential economic growth sector with the fight against climate change and the country’s efforts to tap into a potentially lucrative new income stream.
“Sustainability and climate change are global challenges,” the policy document said. “We believe that The Bahamas should play its part in helping address these crucial issues. We will explore ways in which the country can both do good and leverage new opportunities in this field.
“We will consider the feasibility of introducing incentives for digital asset businesses that prioritise more energy efficient digital assets such as those using proof-of-stake mechanisms over those that are less energy efficient, such as those using proof-of-work.
“To help mitigate the effects of greenhouse gases, we will explore the feasibility of establishing a system of carbon credits and a Caribbean carbon market using DLT (distributed ledger technology or blockchain) and operating within The Bahamas’ digital asset regime.”
The Government’s policy paper also acknowledged the need for Bahamian law firms, accountants, corporate services firms and other financial providers to adjust to the digital assets world. “Equally important is the need for banks, other regulated firms and the professions in The Bahamas to recognise the challenges of dealing with digital and largely non-face-to-face businesses and, accordingly, to expand their capabilities to support a burgeoning digital asset sector,” the paper said.
“Regulated entities will need to understand that, rightly or wrongly, digital assets are perceived as being at a higher risk for money laundering than many traditional financial asserts. As such, they will have to adapt their risk management processes, develop and implement appropriate compliance policies and procedures, and conduct appropriate staff training in order for those entities to enjoy the full advantage of the growth opportunities presented by digital asset businesses.”
Promising to ensure full tax compliance in a regulated Bahamian digital assets sector, the Government’s policy position added: “The Bahamas is committed to fiscal transparency, and the enforcement of rules and international standards and best practices that ensure proper disclosure of the identity of ultimate beneficial owners and relevant stakeholders in digital asset businesses operating in the country as required.
“The Government will endeavour to ensure that digital assets are not used for the evasion of taxes or sanctions, and will seek to ensure compliance with all applicable Tax Information Exchange Agreements (TIEA) and domestic laws and agreed OECD standards.”
And the ‘white paper’ continued: “The Bahamas will support its courts and relevant regulatory agencies (including the Registrar General’s Department) so they can continue to enable parties to protect and enforce rights in trademarks, copyrights, patents and all other forms of intellectual property as they relate to or implicate digital assets.
“As technology and markets evolve, dispute resolution mechanisms in The Bahamas, including arbitration, will strive to properly address disputes relating to digital assets, smart contracts, distributed ledger technology and FinTech (financial technology).”
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