Letters & Opinion

Cryptocurrency, a brief legal perspective

Cryptocurrency is the new gold. Similar to gold, cryptocurrency is traded in a “coin” format and creating new cryptocurrency is called “mining”. Many have been made rich and likewise many have lost significant sums of money chasing overnight riches on the road to El Dorado or the road to Bitcoin.

The early stages of the goldrush created what was known as the “wild west” and we can perhaps use this term to describe the current frontier of cryptocurrency. But it is not wholly a free for all; some countries like China, Algeria and Morocco have outright banned cryptocurrency. In other countries, like Canada, cryptocurrency is legal, but there are restrictions on banking sums earned from the cryptocurrency industry. Where do we stand in Saint Lucia?

Cryptocurrency in Saint Lucia

There is currently no regulation or legislation specifically governing the use of cryptocurrency in Saint Lucia.

Saint Lucia, like the rest of the OECS, utilizes the Eastern Caribbean Dollar which falls under the authority of the Eastern Caribbean Central Bank (“the ECCB”). This authority is charged with advancing the good of the OECS people by maintaining monetary and financial stability and promoting growth and development. The OECS is also regulated by the Eastern Caribbean Securities Regulatory Commission (“the Commission”) which is the authority that governs securities/investment products such as stocks and bonds.

Neither of these entities regulate digital assets, like cryptocurrency, at this moment. However, where a determination is made by the Commission that a digital asset is being traded as a security (such as a stock or a bond), the compliance requirements for dealing in securities business will apply and the company will be required to be licensed by the Commission.

The local legal parameters in relation to cryptocurrency have therefore been left very much to the local legislature of each member of the OECS. To this end the ECCB has drafted and provided members of the OECS with a Draft Virtual Assets Bill. However, at the time of writing, this bill has only been enacted as law in the Federation of St Kitts and Nevis. It still remains to be considered by the legislature of Saint Lucia as to whether it will be adopted and if so, to what extent.

The Savvy Investor

Therefore, for the savvy investor there are no legal prohibitions on commencing a business dealing in crypto-to-crypto currency exchange in Saint Lucia.

In fact, in at least one other OECS country where the draft virtual asset bill has not yet been enacted into law, individuals have commenced implementing Bitcoin Automated Teller Machines (BATMs) which allow for the purchase of fractions of Bitcoin or Bitcoin Cash up to a daily limit of USD$900 (EC$2,430), at various locations. These BATMs have prompted the ECCB to release a statement indicating to the general public that these BATMs, and the services provided, are not currently regulated in that country and recommending that members of the public proceed with caution when engaging with Bitcoin and other virtual assets and entities.

There does not appear to be any restriction on the same happening in Saint Lucia.

The road ahead

Regulation is inevitable as the world moves toward more integration between finance and technology. This unity between finance and technology, commonly referred to as “Fintech”, has the ability to make the world of banking and finance, more convenient, simpler and secure. Significant progress has been made by the ECCB with Dcash; their new digital wallet initiative which allows users to send and receive digital EC currency. No doubt, cryptocurrency has a major role to play in this Fintech movement.

It may therefore be prudent for Saint Lucia and indeed the rest of the OECS, to be ahead of the curve in the way in which it implements and regulates the use of cryptocurrency. The Caribbean has, far too often, been left behind and scrambling to catch up in the regulation of industries which have been existing, informally, for decades.

Perhaps we should not be behind the curve on cryptocurrency as well.

Peter A. Marshall
Attorney at Law

Disclaimer: This article is for general information purposes only. It is not, nor should it be construed or relied on as, individual legal advice.

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