The International Monetary Fund (IMF) has targeted the Bahamas CBDC, the Sand Dollar. It has proposed increased regulatory monitoring and education.
The recommendation came after an Article IV consultation in the Bahamas ended. A team of economists visits a country during such a meeting “to assess economic and financial developments and discuss the country’s economic and financial policies with government and central bank officials,” according to the IMF.
IMF investigates Bahamas CBDC
The IMF stated on Monday that its executive directors “recognized the potential of the Sand Dollar to foster financial inclusion”. It advised the Central Bank of The Bahamas to “accelerate its education campaigns and continue strengthening internal capacity and oversight.”
The consultation marked a divergence from the IMF’s past warnings to numerous nations about the risks of digital assets adoption — though many of those warnings did not reference the Bahamas CBDC.
The IMF also mentioned the significance of a “robust supervisory and regulatory framework” for digital assets, in addition to advising financial education for the public in The Bahamas.
Bahamas strengthens crypto business
The Bahamas Prime Minister Philip Davis made a statement during a May interview at SALT’s Crypto Bahamas conference. He said that the region would include a regulatory framework for crypto firms to operate within its borders. Davis’ office also stated in April that the government would collaborate with the central bank. The business sector will also be included to “enable payment of taxes using digital assets.”
To date, only the Bahamas and Nigeria have officially established CBDCs, although other governments, like China, have been testing digital currencies.
The Bank for International Settlements Monetary and Economic Department surveyed 81 central banks conducted in 2021. It revealed that 90% “engaged in some form of CBDC work”. Furthermore, 60% were “likely to or might possibly issue a retail CBDC in either the short or medium term.”