By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas International Securities Exchange (BISX) is preparing to "jump in" to initial coin offerings (ICOs) and cryptocurrency, having already been approached by players in this area.

Keith Davies, the exchange's chief executive, told Tribune Business that it was already "active in this space" and exploring how these innovations and new technology could be married with traditional capital market structures and safeguards.

Emphasising that BISX was "on it", Mr Davies nevertheless cautioned that the exchange would move carefully to meet all necessary regulatory requirements, and would be careful not to embrace a technology that took it down a dead-end road in terms of reputation and future business. "The short answer is that definitely they should be looked at," the BISX chief executive responded when asked by this newspaper whether it would seek to attract ICOs and technology start-up capital raisings to the Bahamas. Describing the rise of blockchain technology and cryptocurrencies as "disruptive" to traditional systems and ways of thinking, Mr Davies said they "should not be ignored". "Are we at BISX considering it and putting our minds to it? Absolutely yes," Mr Davies told Tribune Business. "We are looking at it, exploring it, and have been contacted by individuals seeking to do it, asking how to do it and who's looking to help us do it.

"We are active in this space. It's difficult to say what will happen next, but at the end of the day whatever we decide to do the regulators will have the final say."

Cryptocurrencies such as Bitcoin are a form of digital money which, using the Internet, are designed to provide a secure and anonymous form of payment for numerous types of transaction.

Their creation is financed by initial coin offerings (ICOs), which raise capital for new cryptocurrency ventures. Dr Johnathan Rodgers, the economic commentator and well-known 'eye doctor, last week told the Bahamas Business Outlook conference that the Bahamas should seek to attract cryptocurrency promoters to use this jurisdiction for their ICOs.

He added that the Bahamas should impose registration fees and levy a 1.5 per cent fee on the sums raised from ICOs, and also target technology start-ups currently unable to raise more than $1 million via initial public offerings (IPOs) in the US. Dr Rodgers suggested that the Bahamas lift this restriction once the necessary disclosure documents were made available to investors.

Throwing his support behind such ideas, Mr Davies said: "Dr Rodgers is absolutely right. His thinking is the type of thinking we should embrace.

"Hopefully all these persons and all that brain power comes together to form a cohesive, sensible solution. You're talking about breaking a lot of traditional ways of thinking, which is very, very difficult, particularly on this scale."

The BISX chief said changing deeply-ingrained mindsets and cultural attitudes was especially difficult in the Bahamas, having encountered resistance to change himself on numerous occasions.

"I have difficulty breaking with what was done historically on the ground in the Bahamas," the BISX chief executive revealed. "I have to deal with it all the time. It's frustrating to talk about people who change direction and pivot on a dime."

Returning to ICOs and cryptocurrency, Mr Davies added: "We're on it. With this type of thing there's no timeline. If we go down a particular road, I've seen this technology and needs change in a matter of months.

"We could jump on something that changes and dies within an hour. Look at Bitcoin and the traditional cryptocurrencies. They're changing, evolving. You've got whole jurisdictions talking about whether to let cryptocurrency in or not. Look at Korea.

"This is a very volatile, potentially developing industry. From a risk profile, most banks and entities will not look at it, but they can't ignore it because it's disruptive to their business. What do we do? We're going to jump in. We're going to go through it, and hopefully at the end come out with and find a plan."

Mr Davies said the problem facing BISX and other traditional stock exchanges was their "centralised" nature, where all activity took place on one platform, whereas cryptocurrencies by their very nature are "decentralised".

"The next step is to what extent do traditional entities, such as exchanges, provide avenues of access for this type of structure," he told Tribune Business. "You're trying to marry something; two things which are diametrically opposed.

"You're talking about the exchange, where it's all about centralisation, and cryptocurrencies and blockchain technology is all about decentralisation. Cryptocurrencies by their very nature are non-jurisdictional; they span currencies, they span jurisdictions.

"We've got to watch out how to marry these two types. That's the struggle going on right now. It's easy to say we should do it, but what safeguards should we have? It's easy to say do, but the devil is in the 'how'," Mr Davies added.

"From my standpoint, whether you're the first mover or late in the game, you don't want to go down the road where you choose a technology and provide a service where you hamper your reputation in the future."