Virtual asset rules could shut Barbadians out, Walters warns

Major international virtual asset platforms could stop accepting Barbadian customers if the cost of complying with proposed legislation outweighs the value of the island’s small market, Opposition Senator Ryan Walters warned on Wednesday.

He also questioned whether Barbados could enforce the Virtual Asset Service Providers Bill against companies operating entirely outside the island.

The bill would establish a registration and supervision regime for firms offering virtual asset services to people here. 

He acknowledged the bill offered real benefits, noting that registration would generate revenue, representatives would have to be based in Barbados, and investors would receive protection they don’t currently have.

“Consumers would get the protection, so Barbadians who are keen on that type of activity would be able to get some level of protection because it is regulated,” he said. “The bill also speaks to separating the investment portfolio versus the company monies.”

But he raised concerns about enforcement.

“I still wonder how robust this legislation can be because generally we’re going to be dealing with a lot of foreign companies,” he said, “foreign companies [that] operate outside of Barbados, [that] operate in cyberspace.”

Senator Walters said the response had to work in practice, not merely on paper: “The government should be in a position to pick up the phone, so to speak, and maybe contact country X, or the country where this business is domiciled, where this business is regulated, and say to them that we have someone here who is popping up in the space.

“There has to be some function, a real way that we can deal with it, not just on paper.”

A system of regulatory cooperation across jurisdictions would make that possible, he said, adding: “I think that is kind of missing from this legislation”. He acknowledged that the minister had referred to international cooperation but said he could not find it in the bill.

Senator Walters also identified potential access issues.

“If a major international platform determines that our market of about 280 000 people does not justify establishing a registered office, appointing a representative, or complying with a separate Barbados regulatory regime, they may simply stop accepting [Barbadian] customers.”

He pointed to online services already unavailable to Barbadians, including monetisation on YouTube and TikTok, and warned that the island could again be shut out if a company decided the cost of regulation was not worthwhile in such a small market.

“Are we, in seeking to regulate providers, inadvertently restricting the ability of [Barbadians] to access legitimate global platforms and invest their own money at their own calculated risks?”

Senator Walters ended with two questions he said remained unanswered: what mechanisms existed to enforce the law against providers abroad and how Barbados would cooperate with other jurisdictions without shutting out “those who want to take that risk, that calculated risk after their own research”.

(LG)