A public comment period on the proposed digital assets and registered exchanges (DARE) bill, 2023, has been opened by the Securities Commission of The Bahamas.
This law aims to better safeguard Bahamian consumers, investors, and markets by keeping them updated with technological advances in the digital asset industry.
More regulations for a financial hub
Strong consumer and investor protection, risk management, and market innovation and development requirements will be included, as will the definition and list of business operations using digital assets.
As part of its comprehensive approach to the regulation of stablecoins, the DARE Bill 2023 strengthens financial and reporting requirements for businesses dealing in digital assets.
The bill also establishes rules for the provision of custody and custodial wallet services, the operation of a digital asset exchange, the provision of advice on and management of digital assets, the provision of staking services, and more. It aims to take effect in The Bahamas by the end of the second quarter of 2023.
Other details of the bill
The suggested changes aim to reduce systemic and contagion dangers associated with digital assets.
New disclosure and reporting requirements, special registration responsibilities, and increased continuous monitoring are just a few examples of how the changes improve protection measures for operators in the digital asset area.
The proposed changes to the DARE legal framework give digital asset businesses room to innovate as the sector develops and give the commission leeway to prescribe new rules for digital asset exchanges and specific requirements for various registrants.
To guarantee that the Bahamian legal system is up-to-date, proactive, and consistent with international standards and best practices, the DARE Bill will create new regulatory frameworks.
Compared to worldwide norms, the DARE Bill of 2023 will cover more ground regarding digital asset operations.
Services could include managing digital assets, dealing with derivatives of digital assets, or acting as nodes in distributed ledger technology networks.
The commission may, if required, include other endeavors in its definition of “digital asset businesses” under the provisions of the bill.
The operators of a digital asset exchange are responsible for ensuring the systems and control it employs are sufficient and suitable for the scope and character of its operations.
The DARE Act takes a comprehensive strategy to ensure that client’s assets are returned to them, and custody or wallet service providers follow all necessary processes to keep their digital assets secure and easy to access.
A new and thorough regulatory framework for stablecoins is established under the DARE Bill.
Stablecoins are defined precisely, registration of existing stablecoins is made possible, appropriate reserve asset forms are detailed, and new rules for reserve asset custody, administration, segregation, reporting, and redemption are laid down.