The Tribune

By DENISE MAYCOCK

Tribune Freeport Reporter

dmaycock@tribunemedia.net

The Bahamas can "set the standard" for blockchain and cryptocurrency regulation by establishing an appropriate supervisory framework now, an industry specialist said yesterday.

Michsel Casey, chairman of CoinDesk Advisory Board, said he "thoroughly encouraged" The Bahamas to take the lead in regulating products such as initial coin offerings (ICOs) during his address to the Bahamas Blockchain and Cryptocurrency Conference.

An author on bitcoin, blockchain and financial technology (fintech), Mr Casey said (ICOs) are becoming an increasingly popular method of raising funds to develop new technology products and services. Bitcoin (BTC), or Ethereum, are digital bearer assets just like cash but do not require a third party to process or approve a transaction.

Mr Casey said ICOs over the past four or five years have now raised up to $40bn. He added that $6bn was raised during the 2018 first half, more than the $5bn generated in the whole of 2017.

"The big buzz at the moment is that The Bahamas is looking at a regulatory framework which I thoroughly encouraged in terms of how we get his whole ICO thing figured out," Mr Casey said.

"I think $40bn is now being raised through these things. The reality is that these tokens are digital assets - they that have programmable money capacity; they have this governance ability - and that's what makes it exciting."

Mr Casey said the Bahamas has a tremendous opportunity to set standards, and added: "Although this is very Wild West and we know there are lots of scams and hype, for the first time there is a market for ideas. If you had an idea, there was no price for the idea. But this is different.

"Right now, we are in this big bubble, but it does not get away from the principle: All markets go through a bubble, but we rely on them to find the price of things.. This is the challenge because on the one hand it is volatile and crazy, and on the other hand it is the wave of the future, and this is how innovation would be funded."

Mr Casey stressed that the Bahamas' future lies not in the old financial system, but in building talent that is in the country. "There are some brilliant people here. Bringing the money, whether that is the big institution of money or local people like you guys - the public servants- and finding ways to bring money together for projects that are community driven," he added.

The author said technology eliminates the need for big financial intermediaries, and added: "We don't need them to keep the ledger for us any more. This is the big opportunity."

He encouraged engaging individuals, social activists and people in the community to find fundraising vehicles for each other.

Mr Casey said the technology still needs much work, and identified critical issues that must be addressed.

He added that there was a scaling problem with bitcoin, and how to build and make it globally accessible.

"That is a challenge, but a lot of people are working on it. It is still difficult to move money in the digital wallet," he said.

Mr Casey added that the user experience needs to be much more reliable, so no one has to worry about losing their private key.

"The most important thing about how you control digital money is your control over your private key - losing that is a big deal. We need to figure out the storage and protection of that process," he said.

Co-ordination was another problem, said Mr Casey explaining that blockchain requires a collaborative effort and getting everyone together is very difficult.

"We image the word 'finance' to be defined by banks. We don't need them; we don't need banks. It sounds rebellious, but it does not mean we need to chuck them out. We need to figure how we transition, and that's where regulators come in to make it happen in a smooth way," Casey said.