INN spoke with Terry Belgrave of the Barbados Stock Exchange about the rising demand he is seeing for security tokens.

Perhaps one of the more unknown segments of the digital asset space is how a digital exchange operates. Digital asset exchanges from Binance, Coinbase and Poloniex are all unregulated exchanges amongst a litany of others. 

Gemini, on the other hand, is one of a few regulated crypto exchanges. Hosting cryptocurrencies, security tokens and coins, both types of exchanges offer investors a place to buy and sell digital assets.

As global regulatory adjustments march on, a number of new jurisdictions and exchanges are entering the digital asset space. Jurisdictions such as Malta, Russia and Jamaica all are regulated jurisdictions where firms can list and raise funds through these exchanges. Barbados has very recently joined the ranks after receiving approval from its financial regulators.


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In February, the Barbados Stock Exchange (BSE) made a strategic agreement with Toronto-based Blockstation, where it would provide a full-stack infrastructure for its new exchange.

In a candid discussion, Terry Belgrave, business development associate for the international security market for the BSE, spoke to the Investing News Network (INN) at the Blockchain Futurist Conference in Toronto about the digital asset listings process.

Belgrave highlighted the key differences between security token listings and a traditional share listings. Belgrave also discussed both the benefits and drawbacks of each, including the challenges within the space.

“In 2017, we as a stock exchange started to hear a little bit more about cryptocurrencies, and crypto assets and we were wondering what the play was going to be for Barbados,” Belgrave told INN. “What we liked in the digital asset space was the security tokens. And what was unique about that was that they were essentially the exact same thing as what we have now, which are dematerialized securities.”

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The partnership with Blockstation provided a number of benefits, including a regulatory portal to operate with, said Belgrave. This connects regulators with a real-time view of market activity to view any irregular or offside activity.

“(Blockstation) actually started with Jamaica — the Jamaica Stock Exchange. We liked the direction that they were going, and Jamaica has a similar type of demographic market as we do,” said Belgrave. Where Barbados distinguishes itself is in its extensive international business presence, Belgrave added.

Belgrave said Barbados is home to a number of major Canadian subsidiaries in addition to the big four accounting firms, including: Deloitte, PwC, Ernst & Young and KPMG and UK real-estate firms.

Focusing primarily on security tokens and asset-backed tokens, the BSE built a system that received expedited approval, based in part on the fact that it was distinct from a traditional exchange.

What made the process of developing a digital asset exchange, Belgrave added, was that the demand for security tokens was there long before the exchange was built.

“We’ve been approached by international mining companies, international investors from the United Arab Emirates who have north of US$500 million of assets or commodities that they are willing to tokenize,” Belgrave said. “But we just didn’t have a way, at our exchange level, for those things to proliferate and trade.”


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With no listings yet, investments are targeted to accredited and institutional investors. This is due to less intensive regulatory requirements, which are necessary for retail investors in the digital asset space. Belgrave noted that the exchange ideally plans to broaden to retail investors, depending on the appetite in the future.

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Particularly where the exchange faced challenges in the process was in the question of custody. The exchange had to contend with the question of how the funds were held, and how to provide the most security as a regulated exchange.

“(Custody) is a topic du jour in this space. Because in the decentralized exchanges, the retail investor has access to unregulated activity, which means if anything goes wrong it leaves the investor left holding the bag,” Belgrave said. “In a traditional stock exchange that would never happen, just like a traditional bank account.”

Discussing the major differences between traditional and non-traditional firms, Belgrave noted that its central securities depository typically handles custody for traditional securities. To navigate the digital space, however, the exchange took a different approach.

When it comes to custody with digital assets, it can lie in the hands of the individual, a third party issuer or the exchange, Belgrave explained. Blockstation then comes in to handle the third party custody listings.

In addition, the BSE requires that digital asset listings build a relationship with their listings counsellors, a requirement that is unique to the exchange. This process guides the listing companies through regulatory requirements and, in turn, further helps to remove liability from the BSE.

Noting the risks involved in unregulated exchanges, Belgrave discussed how this has impacted price movements and investor’s perspective. Regulated exchanges typically provide a number of safeguards and regulatory requirements for a reason.

“What I’ve learned about cryptocurrency is that the demand is enormous, but investors got burned. They really, really, got burned,” Belgrave saud. “That’s the difference between this unregulated, decentralized crypto exchange space and the regulated securities market.”

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With files from Georgia Williams

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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


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