Apart from recommending that the Bahamas enhance finance education to the public, the IMF also insisted on the need for a comprehensive supervisory and regulatory regime for crypto assets.
The International Monetary Fund (IMF) has made its recommendation on the Bahamas’ central bank digital currency (CBDC), also referred to as Sand Dollar. The bank called the country to do two things: intensify oversight and public education.
IMF was reporting on the consultation held with the Bahamas on 9th May 2022 and indicated that its directors noted the huge potential of the Sand Dollar to enhance financial inclusivity. Therefore, it called the Central Bank of Bahamas to intensify education campaigns for enhancing internal capacity and oversight. This consultation marks a sort of departure from the common IMF warnings for countries to avoid cryptos. Notably, most of the warnings did not include CBDCs.
IMF Calls for Strengthening of Regulatory Framework
The IMF gave the recommendations during the conclusion of Article IV consultation in the Bahamas last week. During such meetings, a team of expert economists from the IMF visits to evaluate the economic and financial developments of the respective country. Furthermore, they comprehensively discuss the financial and economic policies with the central bank and government officials.
In addition to public education, the IMF emphasized the need for a strong regulatory and supervisory framework for digital assets. The Bahamas Prime Minister, Philip Davis, when answering questions in an interview at the SALT’s Crypto Bahamas conference, said that the country already has a regulatory framework in place to allow crypto businesses to thrive. About a month ago, in April, Davis indicated they were working on allowing people to pay taxes using crypto assets by partnering with the central bank and private sector.
According to Anthony Scaramucci, the founder of the hedge fund SkyBridge Capital, the Bahamas is likely to develop into a crypto-centric region. He adds that it will carry the tag of the most forward-thinking economy in the coming five years.
Although the Bank of International Settlement (BIS) survey has reported that nine out of ten central banks across the globe are working on CBDC, the Bahamas has moved ahead already and made it a reality. This makes it the second nation after Nigeria to fully actualize CBDC. The survey established that 60% of the surveyed central banks are likely to issue retail CBDC in the short or medium term.