Local cryptocurrency buyers and traders say they are being stymied by the inability to purchase investment currency because the Central Bank suspended access to the Investment Currency Market in May, in order to protect the country’s external reserves, but that that is only part of their ongoing struggle for the freedom to buy and trade cryptoassets.
The Central Bank of The Bahamas (CBOB) released a statement last week explaining that there has been no prohibition against investment in cryptocurrencies or cryptoassets, though they require the purchase of investment currency.
“These are non-domestic instruments which must be funded with foreign exchange, purchased through the Investment Currency Market,” the CBOB statement pointed out.
“Investment currency purchases require exchange control approval. However, the bank suspended access in May 2020, as part of the foreign currency conservation measures introduced in response to the COVID-19 crisis. Market access will resume once private sector foreign currency inflows recover.
“Individuals that currently have approvals to hold and maintain foreign currency denominated investments may continue to trade in such assets, including cryptocurrencies.”
A crypto trader who spoke on condition of anonymity, said there’s no telling how long people will be suspended from trading or if there will be rules added to the crypto space afterward that will make it more restrictive.
He said those in the digital asset space do not see cryptocurrencies as a foreign asset the way foreign currency is looked at, given that the assets exist only in the digital space and has no country of origin like that of a fiat currency.
He contended there needs to be more dialogue between the crypto community, the CBOB and Securities Commission of The Bahamas (SCB) about how cryptoassets are viewed and how they are managed between the two regulators.
Financial services company IslandBit was able to trade cryptocurrency in Bahamian dollars before regulators changed that policy this year and required that foreign currency be bought to trade the digital asset.
IslandBit principal Jillian Bethel told Guardian Business yesterday that she is cautiously optimistic the situation will be resolved favorably, contending that Bahamians who began trading with the company in July are now likely to have a tough time holding their value given the circumstances.
“We’re cautiously optimistic that there will be some positive resolution,” said Bethel.
“Before we started our business, we did a whole lot of surveys and analyses and Bahamians were only a small percentage of the business that we thought we would have. And Bahamians have sustained us from July until now in a huge way, way more than we could have expected and I hope everyone just kind of knows how huge the Bahamian crypto community is.
“I know the local crypto community is a little bit irate right now, we have been kind of pacifying them a bit, telling them hold on, we will find a way. I hope the regulators understand that people want this.”
The government passed the Digital Assets and Registered Exchanges Bill, 2020, (DARE) this year, which developed a legal framework for a properly regulated and compliant digital asset industry.
The act allows for the registration of digital token exchanges and the provision of services related to digital token exchanges, according to a statement from the SCB.
“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,” the statement revealed.
The post Local cryptocurrency traders lament Investment Currency Market restrictions appeared first on The Nassau Guardian.
source https://thenassauguardian.com/local-cryptocurrency-traders-lament-investment-currency-market-restrictions/
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