- By the end of Q2, the SCB hopes to have pushed the measures in the DARE Bill into law.
- The SCB of the Bahamas has enacted a blanket prohibition on algorithmic stablecoins.
The Securities Commission of the Bahamas (SCB) has instituted stringent new regulations for Virtual Assets Service Providers (VASPs) seeking to operate within its jurisdiction as a means of demonstrating that it has learned from the demise of the FTX Derivatives Exchange.
The SCB claims it has raised financial and reporting requirements for exchanges, custodians, staking operators, and asset managers above what is required by its current regulations.
The SCB has stated, in the form of a footnote to the Digital Assets and Registered Exchanges (DARE) Bill that it plans to increase its monitoring and evaluation of cryptocurrency companies and align its standards with those of other advanced jurisdictions such as the European Union, Hong Kong, and the United States.
Blanket Ban on Algorithmic Stablecoins
The SCB is adopting a firm stance, where it will compel exchanges to have sufficient systems and controls that are reflective of their development. After the FTX Exchange failed, many in the sector questioned the SCB’s ability to effectively oversee the crypto sector.
The depegging of Terraform Labs’ TerraUSD (UST) stablecoin around this time last year was the first domino in a chain reaction that eventually brought down the whole digital currency ecosystem. Many crypto firms filed for bankruptcy as a result of the domino effect caused by these collapses.
The SCB of the Bahamas has enacted a blanket prohibition on algorithmic stablecoins to prevent their use by businesses in the country.
The SCB has announced that comments on the proposed guidelines will be accepted until the end of May. Also, by the end of the second quarter, the SCB hopes to have pushed the measures in the DARE Bill into law.