By NEIL HARTNELL
Tribune Business Editor
The Bahamas cannot afford to be “on the outside of this digital assets revolution looking in”, the attorney general asserted yesterday, adding that the Government’s just-released policy paper positions the country to be “a leader”.
Senator Ryan Pinder, addressing the weekly media briefing by the Prime Minister’s Office, reiterated the Davis administration’s objective of facilitating growth in the crypto currency, blockchain and non-fungible token (NFT) sector “while keeping bad actors out”.
Describing the possibilities from the $3trn-and-growing global digital assets industry as “enormous”, he said: “We feel strongly that we can leverage our expertise and successes in financial services to create a digital assets hub here in The Bahamas. From the first week of this administration, we have been determined to build a framework that would allow us not just to participate but to lead in this innovative industry.
“At the same time, and as with any new industry, particularly one that’s changing so quickly, it’s important to protect our reputation and to protect consumers so we know that getting our policies and regulations right matters enormously to setting ourselves up for success and to protect the jurisdiction. I want to be clear: Our policies are designed to encourage growth while keeping bad actors out.”
Pledging that the Government was focused on ensuring Bahamians participate as entrepreneurs, investors and consumers in the digital assets space, Mr Pinder described blockchain technology as an open ledger that records transactions between two parties. This creates an encrypted record that cannot be altered, providing the necessary security for crypto currencies.
“Blockchain technology has the potential to revolutionise financial markets and be a material player in the evolution of the financial services industry and development of financial technology business solutions,” the attorney general said.
“We didn’t want The Bahamas on the outside of this revolution looking in – we know we can make major contributions to this industry, and we believe we can become a digital assets hub and leader in the international financial technology solutions industry. We consulted extensively with regulators and financial and legal experts, and we believe our White Paper positions us to become a leader.”
The Government’s ‘white paper’ policy position, 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.
The policy also proposes employing blockchain technology to help record the trading of Bahamian carbon assets and the activities of a wider “Caribbean market”. “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.”