Building on the DARE Act, 2020, the new legislation introduces comprehensive reforms to address the rapidly evolving digital assets and cryptocurrency markets.
“DARE 2024 sets a new standard in digital asset regulation and underscores our commitment to robust risk management,” said Christina Rolle, Executive Director of the Securities Commission. “We have developed a framework that emphasizes investor protection while fostering responsible innovation, positioning The Bahamas at the forefront of global digital asset regulation.”
The Securities Commission has proactively ensured that DARE 2024 aligns with current international best practices and the recommendations of bodies such as the International Organization of Securities Commissions and the Financial Action Task Force. The legislation reflects extensive global benchmarking, emerging risk assessments, and thorough stakeholder and industry consultations.
DARE 2024 broadens the scope of regulated digital asset activities to include advisory and management services, digital asset derivatives, and staking services. The Securities Commission is empowered to adapt regulations as the sector evolves. The Act also introduces stricter requirements for digital asset exchanges, mandating enhanced investor and consumer protection standards, as well as rigorous systems and controls to ensure transaction integrity and security.
New provisions include regulations for the custody of digital assets and custodial wallet services, enhancing client protection and ensuring accessibility. The Act establishes a pioneering disclosure regime for staking digital assets, whether held on behalf of clients or managed within a staking pool.
DARE 2024 features a detailed stablecoin framework, defining stablecoins, requiring registration of existing stablecoins, and setting standards for their custody, management, segregation, reporting, and redemption. Importantly, it prohibits the issuance of algorithmic stablecoins.
Investor protection is further strengthened with fit-and-proper standards for digital asset issuers, new disclosure and financial reporting requirements, and regulations addressing conflicts of interest and connected third-party relationships. The Act also categorizes non-fungible tokens as either financial or consumer assets, sets liquidity and reporting requirements, prohibits privacy token issuance, and introduces restrictions on proof-of-work mining.
The implementation of DARE 2024 is expected to foster a competitive, robust, and pragmatic regulatory environment for both emerging fintech entrepreneurs and established digital asset businesses in The Bahamas, reinforcing the country’s status as a leading international financial center. This legislation reflects a commitment to evolving regulatory frameworks to enhance protections for consumers and investors.
In addition to DARE 2024, the Securities Industry Act 2024 has also been enacted, updating the regulatory framework for the securities industry to maintain robustness, agility, and compliance with global standards and international best practices.
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