The primary stakeholder groups for the digital currency include the Central Bank, the general public, financial intermediaries licensed by the Central Bank, the public sector (including the National Insurance Board), and general businesses and entities other than licensed financial intermediaries. They each have different respective roles to play in the modernisation process.
Central Bank of The Bahamas plays a multi-purpose role, including currency issuance, monitoring of holdings and sponsoring a centralised KYC/identity infrastructure. In particular, although the Bank will not provide front-end customer service, nor directly sponsor digital wallets, it maintains the ledger of all individual holdings of the digital currency. On a near-to medium-term timeline, the Bank will also promote a centralised KYC register to maintain identification and profile data that would either mandate or allow individuals who do not maintain such information within banks or licensed intermediaries, to supply the data for the register. By regulation, the register would be maintained to be compliant with AML/CFT standards to enable other financial relationships to be established by Central Bank supervised financial institutions (SFIs). This register would draw on data in Government maintained systems, once statutory provisions are enabled, or consent-enabled access frameworks are established.
Financial intermediaries include all Central Bank SFIs that are allowed to operate as sponsors of mobile payment wallets, including clearing banks, credit unions, money transmission businesses (MTBs) and payment service providers (PSPs). Within this group, MTBs and PSPs possess the technology to offer mobile wallets from the outset. It was not expected that either banks or credit unions would have enabled technology for mobile wallets at the onset of the digital currency’s introduction, but it remains an option for them to pursue.
Clearing banks and credit unions are expected to contribute to the customer due diligence regime; facilitate connectivity of deposit accounts with mobile wallets, and enable foreign exchange transactions. In particular, the Central Bank will promote regulations to permit all PSPs, with the consent of enrolling participants, to rely on KYC documentation already possessed by commercial banks. By regulations, it is proposed that a legal obligation be imposed on banks and credit unions to share customer requested KYC confirmation with any SFI provider of payments services. Through ACH integration, banks will honour real-time direct debit or withdrawals from deposit accounts of wallet holders that finance acquisitions of digital currency.
The public sector has multiple roles to play, including as lead originators and recipients of digital payments. This includes equipping both the payments receipting and disbursing systems to conclude transactions in digital currency. In particular, the Government and the NIB are expected to be the two largest originators of digital payments. Both also represent the largest store of official data on the status of private commercial entities that might enrol in digital payments services.
Project Sand Dollar is a forward-thinking initiative that will implement pioneering technologies to reduce reliance on cash. Through cutting-edge technology, Sand Dollar promises the modernisation of the country’s digital payments capabilities, increase transactional efficiency and reduce service delivery costs. To accomplish this mammoth task, the Central Bank has partnered with international technology firms, including:
