The BahamasWhere Advanced Technology And HNW Investors Meet

The Bahamas leads the world in the field of payment systems, having created the world’s first nationwide central bank digital currency, the Sand Dollar, in 2020. In implementing this digital coin of the realm, The Bahamas beat China’s ‘digital renminbi’ to the market by six months. The Government has coupled the introduction of the Sand Dollar with plans to eliminate the use of cheques in The Bahamas in favour of digital currencies.

The jurisdiction has also been a forerunner in the world of cryptocurrency regulation. Flexible but thorough regulation applies to digital-token exchanges, payment-service providers that use digital assets, digital-asset service providers and the provision of services relating to the sale of digital assets. HNW investors who are interested in structured ‘crypto’ products find this stable environment attractive.

With the benefit of plenty of experience in this fast-paced sector, the Government plans to reform the DARE Act 2020 – The Bahamas’ ground-breaking digital-assets law – imminently to address such matters as the segregation of client’ assets, decentralised finance or DeFi, staking, yield farming, stablecoins, regulatory accounting, Web 3, non-fungible tokens (NFTs) and the advertising of digital assets. Firms registered under the DARE Act already have to follow the same anti-money-laundering rules as traditional financial institutions, in accordance with the precepts of the Financial Action Task Force and international best practice.

The Bahamas also provides a domicile for a number of global retail brokerages that make fully-automated trading a possibility, making it easy for users to submit orders automatically through mobile applications. History abounds with traders who failed to make the most of market movements because their own frailties and insecurities played them false. There are also some noble examples of traders who stuck to their set strategies, no matter how deeply they experienced the usual raging emotions of greed, fear and everything in between. The automatic trading option allows perfectly ordinary HNW investors – who lack the training and self-discipline that traders are supposed to have – to sidestep these emotions to a large degree and to trade in stocks and derivatives according to their pre-arranged policies.

This communiqué is part of a larger report on financial services in The Bahamas which will come out in stages during the course of the year.