Not just sun, sand and sea: the Bahamas is charting a course to become the new crypto haven.
“We have the vision to transform the Bahamas into the leading digital asset hub in the Caribbean,” said Bahamian Prime Minister Philip Davis, opening up the Crypto Bahamas conference in the nation’s capital, Nassau.
Co-organized by billionaire Sam Bankman-Fried’s crypto derivatives exchange FTX, which moved from Hong Kong to establish its headquarters in the Bahamas last year, and the thought leadership forum SALT, the event will see high profile speakers including former U.S. president Bill Clinton and ex-prime minister of the U.K. Tony Blair. Other notable speakers include Ark Invest’s founder Cathie Wood, former CFTC chairman Chris Giancarlo and FTX ambassador Tom Brady.
The high-profile guests will discuss everything from the pace of development in the industry to regulation and how digital assets fit into a modern portfolio. But it is worth noting that the conference is happening at a time of intense market turmoil, where major assets such as Bitcoin and Ether are down more than 20% year-to-date. Solana, Bankman-Fried’s preferred asset, is down by 45%.
Ahead of the summit, the government of the Bahamas published a policy white paper, outlining the country’s digital asset strategy for the next four years. Part of the plan, which was developed in accordance with work done by global organizations such as the G20, the Bank for International Settlements (BIS), the Financial Action Task Force (FATF), the Organization for Economic Cooperation and Development (OECD) and the International Organization of Securities Commissions (IOSCO), includes allowing residents to pay taxes in digital assets.
In particular, the country calls out two digital-asset specific pieces of legislation, the Digital Assets and Registered Exchanges Act, 2020 (the DARE Act) and the Financial and Corporate Service Providers Act, 2020 (the FCSP Act), which established safeguards for the custody of digital assets. Both legislations played a key role in convincing exchanges like FTX to domicile in the islands. According to the white paper, the Securities Commission of The Bahamas is already processing several other applications for registration, though no further details have been disclosed.
Additionally, the authorities pledged to work closely with the financial regulators, the Central Bank of The Bahamas, and the private sector on ways to enable Bahamians to access digital assets and promote wider use of the Bahamian dollar digital currency, the Sand Dollar. Launched in October 2020, it is one of the world’s first central bank digital currencies (CBDCs). A 2021 PwC report ranked the Sand Dollar as the leading project of this kind in terms of maturity, even ahead of China’s digital yuan.