Bahama Announces Cryptocurrency Regulations
November 12, 2018 2:07 pm
The Central Bank of The Bahamas (CBOB) has published a document which describes how it intends to regulate cryptocurrencies. The regulation includes Initial Coin Offerings (ICOs) as a part of decreasing the tax evasion, fraud, and money laundering. The regulation makes it clear that only the state-issued cryptocurrency will be supported.
CBOB said that the bank wants to improve the sector’s competitiveness without compromising the integrity or international reputation of The Bahamas. It also aims to enhance the financial safety of Bahamian households. The bank included that these concerns are consistent with international best practices.
The bank has supported the international regulatory convention approach that classifies cryptocurrencies as crypto-assets rather than cryptocurrencies. This express the difference between central bank-issued fiat currency and cryptocurrencies such as bitcoin or ripple.
The Bahamas will be modifying the regulations of 2017 to ensure comprehensive coverage of both Bahamian dollar and foreign currency.
CBOB has planned to control the limit of digital currencies which might transact with commercial banks while banning direct convertibility between the local fiat unit, state-backed crypto-asset or forex-denominated cryptocurrencies.
The central bank warned:
“It is likely that only central bank sponsored digital currencies, or payments instruments fully backed by central bank issued currencies or deposits will be eligible for issuance by payment services providers.”
The bank mentioned the necessity to protect investors from investing in ICO-related scams. Companies must provide evidence to the Securities Commission of the Bahamas (SCB).
Recently, Wissanu Krea-ngam, the Deputy Prime Minister of Thailand called for more regulations on cryptocurrencies. Krea-ngam was recently a part of the Counter-Terrorism Financing Summit. Meantime, he said that experts should not be satisfied with current security protocols so as not to shuffle behind criminals that would use digital currencies for funding terrorism or money laundering.