The virtual absence of regional administration of virtual assets in the Caribbean as it pertains to OECD tax transparency guidelines

Abstract

Virtual-assets, including cryptocurrencies, can be transferred, and held without interacting with traditional financial intermediaries and without any central administrator having full visibility on either the transactions carried out, or the location of crypto-asset holdings. This is an emerging digital market, and it is neither issued nor guaranteed by the central banks or a public authority. This new market of exchange is currently out of scope in the legislation, regulations, and policies of the Caribbean diaspora. The profound lack of attention in the governance of this digital market, creates risks for consumer protection and countries’ financial stability. It also poses a threat to market manipulation, tax evasion and financial crimes. While we applaud the likes of Bahamas, Cayman Islands and Bermuda on being the first to legislate the digital market by inducting specific legislation, which itself partially meet this global concern, the region has not adopted a uniform policy framework to capture the exchange of information, identification of originators and beneficial owners in the interest of tax transparency and to the alleviation of financial crimes. CARICOM, as the governing body for the region, needs to impose key provisions for the issuing and trading of virtual-assets - covering transparency, disclosure, authorisation and oversight of transactions. Most jurisdictions are exposed to the risk differently and will seek to implement independent operational adaptation in silos, but there is an imperative proposition for a uniform collective policy agenda where consumers, policy makers, supervisors, and administrators would be better informed about the risks, costs and charges. This uniformed approach to the policy framework will promote accountability and transparency in support of financial market integrity and financial stability by developing a standard for regulating public offers of virtual assets, using artificial intelligence, financial intelligence, and an agreed regional guideline. Simultaneously it ought to be aligned to Financial Action Task Force Recommendation 15 which include measures against market manipulation and to prevent money laundering, terrorist financing and any other financial crimes.