DARE Legislation Opens The Door For New Industry

• Published date: 17 December 2020
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Technology, Financial Services, Securities, Fin Tech
• Law Firm: Bahamas Financial Services Board
• Author: Bahamas Financial Services Board

Nassau, The Bahamas, 4 December 2020 - The passage of the Digital Assets and Registered Exchanges Bill, 2020 (DARE) has put in place the legal framework for a vital, well-regulated and compliant industry in The Bahamas for those interested in entering the digital asset space.

It also creates specific opportunities for entrepreneurial Bahamian Fintech firms to enjoy the credibility of being licensed and functioning under a comprehensive regulatory regime and participate in the Fintech industry that is being forged with the DARE Bill.

DARE legislation passed in the House of Parliament on 3 November, facilitates the registration of digital token exchanges, and the provision of services related to digital token exchanges. It also provides for the regulation of digital assets- based payment service businesses and for the registration of financial services related to the creation, issuance or sale of digital tokens and other digital assets.

Prime Minister and Minister of Finance the Most Hon. Dr. Hubert Minnis said a Fidelity Digital Assets' Institutional Digital Assets Report illustrates the explosive growth of virtual assets, including virtual currencies, and the need for a jurisdiction like The Bahamas to equip itself with compliant and competitive legislation to participate in the digital asset space.

"The survey of almost 800 institutional investors across the US and Europe indicated that thirty-six percent (36%) of respondents are invested in digital assets, and that 6 out of 10 believe digital assets 'have a place in their investment portfolio'," said the Prime Minister.

According to the report, over 80 percent of investors indicated that they would be interested in institutional investment products that hold digital assets.

"As an international financial centre with a considerable wealth management focus, this trending investor interest speaks to the potential for Bahamas-based wealth management experts to offer financial service related to digital assets," the Prime Minister said.

The SCB has been working in close consultation with industry and outside consultants on the development of DARE for the past two years. SCB Executive Director Christina Rolle noted that with the intense interest in digital asset related businesses, it was essential for the jurisdiction to have an appropriate regulatory framework in place.

"The number of queries the jurisdiction has received from entrepreneurs interested in venturing into this form of capital raising has...