NASSAU, BAHAMAS — In the wake of the crypto market crash several months ago, the Securities Commission’s top executive yesterday noted that the regulator has made several recommendations to beef up the Digital Assets and Regulated Exchanges (DARE) Act, particularly as it relates to stablecoins.
Christina Rolle, the Security Commission’s executive director, acknowledged during a webinar on the Framework for Digital Assets Business that the collapse of TerraUSD highlighted some “serious concerns” for industry regulators. TerraUSD or UST, an algorithmic stablecoin, was supposed to be pegged to the US dollar but lost its dollar peg. The collapse resulted in a ripple effect throughout the crypto market.
Rolle said: “The Commission is looking to amend the DARE Act to provide a clear and concise definition for stablecoins, reflecting the requirement that stablecoins must be fully backed by assets including fiat currencies, commodities and other financial instruments. We will create disclosure requirements bespoke to stablecoins. The requirements should be in addition to general requirements of disclosure for token issuances and include obligations for issuers to include the offering document details on the operation and mechanics of the stablecoin.
“We will require disclosure around the standards and processes applied to the redemption of stablecoins and ongoing reporting to the Commission as appropriate,” she added. “The Commission is also looking to ensure that issuers of stablecoins also be subject to financial reporting including quarterly reports and annual audit requirements.”
Rolle also noted that next January The Bahamas will play host to a major Fintech festival known as D3 – the Digital, Decentralised and Disruptive Event. The event is expected to attract thousands of fintech and Web3 leaders and is slated for January 24-26 at the Atlantis resort.
The DARE Act, which was passed in Parliament in December 2020, facilitates the registration of digital token exchanges and the provision of services related to them. The legislation has been praised by stakeholders in the cryptocurrency space and has been credited with helping to attract FTX Digital Markets to The Bahamas.
