- The Bahamas’ government is in the process of putting into effect a new legislation to regulate the cryptocurrency industry after the FTX meltdown.
- The new law would introduce a new and extensive legal structure for regulating stablecoin, staking services, and mining businesses.
- Residents of the Bahamas have until May 31 to provide input on the proposed regulations.
In the wake of FTX‘s fall, Bahamas regulators are revising cryptocurrency regulations to introduce stronger rules for safeguarding investors. The Bahamas‘ financial watchdog, the Securities Commission of the Bahamas (SCB), started a consultation on the new regulations that were being presented.
According to Christina Rolle, executive director of the Bahamas’ regulator, the new bill might rank among the most cutting-edge measures of digital asset policy in the world because it addresses stablecoins, proof-of-work mining, and staking.
The regulations, which are included in the Digital Assets and Registered Exchanges (DARE) Bill, additionally include tougher guidelines for stablecoin issuers and an expansion of the scope of “digital assets businesses.”
The SCB claimed that in contrast to its current regulations, it has tightened fiscal and reporting requirements for asset managers, staking operators, custody service providers, and trading platforms operating in the market.
Additionally, DARE 2023 provides a definition of stablecoins, an explanation of permissible asset reserves, and guidelines for managing reserves, such as segregation and redemption. Algorithmic coins are not covered by the law.
NFTs are classified as either financial or consumer assets, with the former being under regulatory control.
In accordance with the new legislation, operators of digital asset exchanges must also make sure the technologies they employ are adequate for the size of their operations.
However, the regulator’s decision to impose additional restrictions was not solely motivated by the FTX tragedy. It described the initiatives taken by the governments of the European Union, Hong Kong, and New York, who recently signaled their determination to safeguard cryptocurrency consumers by enacting more stringent laws and regulations.
The suggested modifications to the DARE legal framework give businesses dealing in digital assets room to innovate as the market develops. They also give the Commission the flexibility to impose additional regulations that apply to digital asset exchanges and specific necessities for multiple types of registrants.
The SCB stated that the rules are currently available for public comment through May 31. Additionally, the SCB hopes to have the DARE Bill’s recommendations passed into law by the end of the second quarter.