Central Bank: clarity in crypto regulation needed

CENTRAL BANK governor Dr Alvin Hilaire called for urgent legal and regulatory clarity in cryptocurrency during a panel discussion on considerations in crypto asset regulation held at the Central Bank’s auditorium in Port of Spain on Tuesday.

“In TT we have seen that there is some growing interest. There is some mining taking place, we are seeing that people are accepting it as payments, we have our regulatory sandbox and hub, however the current domestic legislation does not deal frontally with this,” he said.

Hilaire said a recent IMF technical assistance report commissioned by Central Bank and the TT Securities Exchange Commission (TTSEC) indicated that legal and regulatory uncertainty may limit the development of business models connected to cryptocurrency assets.

He said that the three regulators – the TTSEC, Central Bank and the FIU – issued a warning concerning issues surrounding cryptocurrency.

“You should look at the issues involved. You have consumer protection issues. It could be volatile, it is not legal tender and it could be a scam or a ponzi scheme,” he said. “If you do not have clarity, you will not be able to move forward, you will not be able to promote the industry while having investor protection.”

“So the time is now, we need to move quickly to promote public education because in our view inaction is not an option.”

Acting TTSEC CEO Lystra Lucillo said AML/CFT requirements and FATF recommendations are among the considerations being made as it seeks to build a regulatory framework.

“We are going to launch an impact assessment and that is where we will determine what are the risks involved and the pros and cons of cryptocurrency,” she said.

She noted that cryptocurrency in comparison to Fiat currency has an elevated risk element when it comes to volatility, technical and operational aspects and regulations. She added that the TTSEC is now seeking public feedback on regulations to cryptocurrency.

“We want to understand whether crypto assets are acting as substitutes for regulated securities. Are people taking more of their investment funds and putting it into these things.”

Mark Pereira, founder of Zed Labs said collaboration and innovation is needed for cryptocurrency in TT. For cryptocurrency, he said that would mean a number of things including decentralisation, accessibility, transparency and collaboration.

“We all need to provide forums where we could get together and start to solve these problems,” he said.

“The real goal outside of fintech and outside of innovation is financial inclusion,” he added. “We want to drive foreign direct investors toward our country, we need to see more economic activity, we want to become a regional financial hub and we want less crime… this is a way in which we can accomplish that.”