Fri | Apr 26, 2019

Jamaica Stock Exchange exploring cryptocurrency trading

Published:Sunday | August 19, 2018 | 12:00 AM
The Jamaica Stock Exchange in Kingston. File
Marlene Street Forrest, managing director of the Jamaica Stock Exchange.

The Jamaica Stock Exchange (JSE) has selected Toronto-based fintech company Blockstation to explore the possibility of offering cryptocurrency trading on the local platform.

Consequently, the JSE based in Kingston has signed a memorandum of understanding with the Canadian company, paving the way for further collaboration.

JSE Managing Director Marlene Street Forrest says the service would satisfy considerable investor interest in digital assets.

"We are also proud to be at the forefront of bringing innovation to capital markets," said Street Forrest in a joint statement with Blockstation. "We are very comfortable moving forward based on the training and support provided by Blockstation, and because their trading platform incorporates familiar compliance rules to ensure a fair marketplace," she said.

Efforts at comment from the Bank of Jamaica (BOJ), which regulates foreign exchange, electronic payments and mobile money, were unsuccessful up to press time on whether the JSE's ambitions would require its oversight.

BOJ is wary about virtual currencies but has not formalised a policy around the issue to date. In February of this year, the central bank issued a release citing potential benefits from blockchain technology for financial inclusion, but warned that virtual currencies are not legal tender in Jamaica, and that the BOJ up to that point had not authorised any entity to operate a virtual currency platform.

A live workshop on cryptocurrency trading was completed with an initial group of five JSE broker members and representatives of local regulators, according to Blockstation.

Through this agreement, JSE could become one of the first international stock exchanges to deploy an online digital currency and token trading platform. Blockstation said it would include trading, quotes, execution and settlement services in a format that aligns with current regulatory and compliance standards.

"The JSE chose Blockstation's end-to-end, electronic communication network and order management system to facilitate trading, clearing and settlement of blockchain tokens for its broker-dealers and their investing clients," Blockstation said on its website.

The JSE has been searching for a suitable online trading system to meet rising demand for digital asset investing for some time. The exchange announced back in April 2017 that it was exploring blockchain technology and entered into a non-binding memorandum of understanding with another entity, Veritaseum LLC.

"It is very important for investors to be able to invest in digital assets through their traditional financial institutions," said Kirk Brown, head trader at brokerage house, Sagicor Investments Jamaica Limited. Brown was quoted in the release as one of the brokers at the workshop.

"It's exciting to be at the cutting edge where digital currency demand meets safe reliable access," he said.

Blockstation provides international stock exchanges and brokers with turnkey solutions for trading, clearing and settlement of Bitcoin and other digital assets. The Canadian company's main software is called Smart ECN (electronic communication network) but it also offers a suite of technology products designed to meet the security, liquidity and regulatory requirements of financial institutions.