What are vir­tu­al as­sets?

The Trinidad and To­ba­go gov­ern­ment has tabled the Vir­tu­al As­sets and Vir­tu­al As­sets Ser­vice Providers Bill 2025 (“the Bill”). Be­fore we can dis­cuss the im­pli­ca­tions and ef­fects of the Bill, it would be use­ful for us to get an un­der­stand­ing of what is a vir­tu­al as­set.

Vir­tu­al As­sets, as re­ferred to in the bill, are the same as the more com­mon­ly used name, dig­i­tal as­sets (re­ferred to in US/EU leg­is­la­tion), and are very spe­cif­ic to as­sets that ex­ist us­ing blockchain tech­nol­o­gy. Let’s delve a bit in­to his­to­ry as well as de­fine some terms be­fore we re­al­ly get to the punch­line.

His­tor­i­cal­ly, com­pa­nies were not trad­ed pub­licly which meant that every com­pa­ny was pri­vate. In 1602 the Dutch East In­dia Com­pa­ny cre­at­ed the first ini­tial pub­lic of­fer­ing (IPO) and so pub­lic shares in com­pa­nies were birthed.

To­day, there is a new form of “com­pa­ny” that has been cre­at­ed. It is called a blockchain and it is unique, de­cen­tralised soft­ware that al­lows in­for­ma­tion—such as mon­ey trans­fers, con­tracts, or da­ta—to be stored across many com­put­ers in a way that is se­cure, trans­par­ent, and very dif­fi­cult to al­ter. It has sig­nif­i­cant ad­van­tages over cur­rent soft­ware or net­works, as it us­es au­to­mat­ed code (i.e. smart con­tracts) which al­lows it to be faster and more ef­fi­cient than oth­er ways we have pre­vi­ous­ly trans­act­ed with fi­nan­cial prod­ucts.

These new “com­pa­nies” al­so is­sued their ver­sion of pub­lic shares, and they are called to­kens. These to­kens give the own­ers a claim on the “growth” of the blockchain net­work (as well as vot­ing rights in some cas­es). This growth at times comes in the form of ap­pre­ci­a­tion (such as Bit­coin) but in some cas­es own­ers get a claim on fees (e.g. Ethereum).

So to re­cap:

• Stocks = a claim on com­pa­ny cash flows (plus vot­ing rights)

• Bonds = a claim on as­sets

• To­kens = a claim on the “growth” of a Blockchain net­work (plus vot­ing rights in cas­es)

What is the Vir­tu­al As­set Bill and what does it aim to do?

The Bill seeks to reg­u­late the ad­min­is­tra­tion and trad­ing of vir­tu­al as­sets. The first step in that process is re­strict­ing the use of vir­tu­al as­sets by ef­fec­tive­ly ban­ning busi­ness ac­tiv­i­ties re­lat­ed to them un­til De­cem­ber 31, 2027. The Bill would re­quire all cur­rent op­er­a­tors to no­ti­fy the Trinidad and To­ba­go Se­cu­ri­ties and Ex­change Com­mis­sion (“the Com­mis­sion”) with­in one month of com­mence­ment of the Act and cease op­er­a­tions with­in three months. Vi­o­la­tions car­ry se­vere penal­ties—up to $5,000,000 in fines and five years’ im­pris­on­ment.

The Bill cov­ers five main ac­tiv­i­ties: ex­chang­ing vir­tu­al as­sets for tra­di­tion­al cur­ren­cies; ex­chang­ing be­tween dif­fer­ent vir­tu­al as­sets; trans­fer­ring vir­tu­al as­sets, safe­keep­ing or ad­min­is­ter­ing vir­tu­al as­sets, and pro­vid­ing fi­nan­cial ser­vices re­lat­ed to vir­tu­al as­set sales.

While the pro­posed leg­is­la­tion aims to align with Fi­nan­cial Ac­tion Task Force rec­om­men­da­tions on com­bat­ing mon­ey laun­der­ing and ter­ror­ist fi­nanc­ing, its in­tro­duc­tion has sparked con­sid­er­able con­tro­ver­sy.

The reg­u­la­to­ry frame­work would grant the Com­mis­sion ex­ten­sive sur­veil­lance and en­force­ment pow­ers but would si­mul­ta­ne­ous­ly pro­hib­it it from grant­i­ng any au­tho­ri­sa­tion to op­er­ate un­til af­ter 2027. Crit­ics of the Bill de­scribe this as an out­right ban rather than a reg­u­la­to­ry frame­work.

Pro­po­nents ar­gue the pause would al­low reg­u­la­tors to build ca­pac­i­ty and de­vel­op com­pre­hen­sive over­sight mech­a­nisms. How­ev­er, stake­hold­ers con­tend this ap­proach would sac­ri­fice in­no­va­tion for per­ceived safe­ty, po­ten­tial­ly dri­ving tal­ent and in­vest­ment off­shore while the rest of the world ad­vances in dig­i­tal fi­nance.

Vir­tu­al As­set mon­ey laun­der­ing and il­lic­it ac­tiv­i­ty

Giv­en that one of the more fre­quent crit­i­cisms of vir­tu­al as­sets by gov­ern­ments and reg­u­la­tors is its use for mon­ey laun­der­ing and il­lic­it ac­tiv­i­ty, I thought it worth­while to dis­cuss this point ex­plic­it­ly. There are two cru­cial points worth not­ing here that I have rarely seen brought in­to the pub­lic dis­course (though this is well known in the in­dus­try and has be­come very ap­par­ent with US reg­u­la­tors):

1) Vir­tu­al As­sets (run­ning on blockchain in­fra­struc­ture) are sub­op­ti­mal at con­duct­ing il­lic­it ac­tiv­i­ty be­cause of trans­paren­cy:

Vir­tu­al As­sets run on pub­lic ledgers / net­works, mean­ing that the ac­tiv­i­ties are eas­i­ly tracked and fol­lowed. The pri­ma­ry rea­son the pub­lic hears about these ac­tiv­i­ties so fre­quent­ly is the ease with­which reg­u­la­tors can trace and track ac­tiv­i­ties, there­by cap­tur­ing the per­pe­tra­tors. Yes, you can con­ceal your ac­tiv­i­ties with much ef­fort, but it is far eas­i­er to use ex­ist­ing cash or tra­di­tion­al ways of mon­ey laun­der­ing than it is to do it over a blockchain net­work.

Com­pa­nies like Chainal­y­sis (https://www.chainal­y­sis.com/) can track ac­tiv­i­ty across the globe with in­cred­i­ble ac­cu­ra­cy and speed and many agen­cies use them to mon­i­tor il­lic­it ac­tiv­i­ty and de­risk those ac­tiv­i­ties on a coun­try or com­pa­ny lev­el.

2) Sta­tis­tics do not sup­port the view that Vir­tu­al As­sets are a haven for il­lic­it ac­tiv­i­ty:

Ac­cord­ing to Chainal­y­sis 2025 Cryp­to Crime re­port, the his­tor­i­cal per­cent­age of il­lic­it ac­tiv­i­ty rep­re­sent less than 1 per cent of the to­tal vol­umes of Vir­tu­al As­sets. For com­par­i­son, The Unit­ed Na­tions has es­ti­mat­ed that the amount of mon­ey laun­dered glob­al­ly each year through cash and the tra­di­tion­al fi­nan­cial sys­tem rep­re­sents 2 to 5 per cent of glob­al GDP. Ad­di­tion­al­ly, de­spite the growth of the Vir­tu­al As­set in­dus­try over the past few years, the share of il­lic­it ac­tiv­i­ty has re­mained low and ac­tu­al­ly de­creased sub­stan­tial­ly in 2024. The re­al­i­ty is that il­lic­it ac­tiv­i­ty is a minis­cule per­cent­age of the ac­tiv­i­ty in Vir­tu­al As­sets. (https://www.chainal­y­sis.com/blog/2025-cryp­to-crime-re­port-in­tro­duc­tion/)

A missed op­por­tu­ni­ty

3) While the gov­ern­ment of T&T has the right to and should in­tro­duce a reg­u­la­to­ry frame­work for the in­dus­try, it is hard to ar­gue against the view that the Vir­tu­al As­sets Bill in its cur­rent form rep­re­sents a closed ap­proach to an emerg­ing in­dus­try. It is al­so hap­pen­ing at a time when the de­vel­oped world is em­brac­ing the tech­nol­o­gy. I view this as a missed op­por­tu­ni­ty for one of the ma­jor eco­nom­ic pow­ers in the re­gion.

Adop­tion of vir­tu­al as­sets al­lows Trinidad-based fi­nan­cial prod­ucts to par­tic­i­pate on the glob­al fi­nan­cial scale as blockchains be­come a pre­ferred and open mar­ket­place to con­sume such prod­ucts. At the busi­ness lev­el, fi­nan­cial in­sti­tu­tions can use sta­ble­coins to sup­ple­ment ex­ist­ing pay­ment rails such as Visa/Mas­ter­card or SWIFT. This has the ben­e­fit of re­duc­ing costs and in­creas­ing speed for busi­ness to trans­act.

In my opin­ion, Caribbean par­tic­i­pa­tion in the vir­tu­al as­set are­na rep­re­sents a rare op­por­tu­ni­ty to par­tic­i­pate in a glob­al fi­nan­cial trans­for­ma­tion on equal foot­ing with Wall Street in­sti­tu­tions. Un­like pre­vi­ous waves of in­no­va­tion that re­quired in­sid­er ac­cess or em­bed­ded in­sti­tu­tion­al con­nec­tions, blockchain tech­nol­o­gy is open and ac­ces­si­ble to any­one with an in­ter­net con­nec­tion and a com­mit­ment to in­vest.

4) While I rec­og­nize my bias from be­ing in the in­dus­try, I be­lieve what is oc­cur­ring with vir­tu­al as­sets is

the largest macro shift that has tak­en place since 1971, when the US dol­lar went off the gold stan­dard. Mon­ey and fi­nance as we know it is mov­ing on­to blockchain ar­chi­tec­ture, and I fear that this new Bill will mean T&T will be left be­hind in the new era of dig­i­tal fi­nance.

Ra­mon Pit­ter is the chief in­vest­ment of­fi­cer of Flow­track, an in­vest­ment firm spe­cial­iz­ing in Bit­coin, Ethereum and oth­er high con­vic­tion

blockchain as­sets.