By YOURI KEMP
Tribune Business Reporter
ykemp@tribunemedia.net
THE Securities Commission’s top executive yesterday said the regulator expects to have 20 entities registered under the Digital Assets and Registered Exchanges (DARE) Act by year-end 2022.
Christina Rolle, its executive director, told the Bahamas Institute of Chartered Accountants (BICA) week seminars that this growth bodes well for the country’s ambitions to become a regional and Western Hemisphere hub for the digital assets industry.
Speaking as news broke of the potential forced sale of FTX, the flagship digital assets investment for The Bahamas, Ms Rolle said: “The Commission implemented a world-leading legislative framework for the regulation of digital asset businesses, and the issuance, sale and trade of digital assets.
“Under the DARE Act, The Bahamas has registered two of the largest cryptocurrency exchanges in the world (one of which is FTX) and there are other industry FinTech (financial technology) leaders moving through the application process. This signals an excellent regulatory regime.”
OKX, another cryptocurrency exchange, just last week announced it had completed the Securities Commission’s licensing and registration process while unveiling plans to hire 30 Bahamians during its 12 months in operations and 100 by year three.
Ms Rolle reaffirmed that the Securities Commission is now focusing attention on the regulation of “stable coins” in the aftermath of TerraUSD’s collapse. She said: “The collapse of TerraUSD earlier this year highlighted some of the serious regulatory concerns around stable coins, particularly algorithmic stable coins that may be backed by another digital asset.
“The Securities Commission is looking to amend DARE to provide a clear and concise definition of stable coins, reflecting the requirement that stable coins must be fully backed by assets, including fiat currencies, commodities or other financial instruments.”
She added that the regulator will also “create disclosure requirements bespoke to stable coins”. Ms Rolle added: “The requirements should be in addition to the general requirements of disclosure for token issuances, and include obligations that issues of stable coins include in the offering document details on the operation and mechanics of the stable coin.
“Required disclosures around the standards and processes apply to the redemption of stable coins, and require ongoing reporting to the Commission and investors as appropriate. The Commission is also looking to ensure that issues of stable coins are subject to financial reporting, including quarterly financial reports and annual audit requirements.”
Stablecoins are cryptocurrencies where the price is designed to be pegged to a referenced asset. The asset may be fiat money, exchange-traded commoditie, or a cryptocurrency. Presently, the Securities Commission oversees or regulates 154 securities firms, one marketplace one clearing facility; 51 investment fund administrators; 702 investment funds; 265 financial and corporate service providers; and five digital asset businesses.”
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