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Public Consultation on the Digital Assets Guidelines, 2022

Published: Wednesday December 28th, 2022

These Guidelines provide an overview of the Central Bank’s expectations of SFIs that engage in digital asset activities. Digital assets are a diverse asset class with varying characteristics that in certain cases may resemble traditional financial assets such as bonds, equities, commodities and cash held in custody. The Central Bank subscribes to the philosophy of “same risk, same activity, and same treatment”[1]. Therefore, the prudential treatment of digital assets is based on the risks that are associated with the underlying characteristics of these assets. SFIs should take a risk-based approach, factoring in their Board approved risk appetite and their resources. Where there may exist additional risks posed by these assets, SFIs should ensure that the risks are promptly identified, measured, and mitigated.

These Guidelines should be read in conjunction with The Bahamas Capital Regulations, 2022 (“Capital Regulations”), The Banks and Trust Companies (Acquisition of Shares) Regulations, 2005, Guidelines for the Management of Capital and the Calculation of Capital Adequacy (“Capital Adequacy Guidelines”), Guidelines for the Corporate Governance of Banks and Trust Companies Licensed to do Business within and from within The Bahamas (“Corporate Governance Guidelines”), AML/CFT Guidelines, Guidelines for the Management of Large Exposures (“Large Exposures Guidelines”), The Management of Credit Risk Guidelines, and the Technology Risk Management Guidelines. The Central Bank endorses the principles in the Basel Committee on Banking Supervision (“the Basel Committee”) draft standard text, Chapter SCO60 Cryptoasset Exposures. SFIs are encouraged to refer to the full Basel document at [2]

[1] Adopted from Basel’s Cryptoasset Exposures Framework.

[2] In this paper, the wording digital assets is used, which is the generic and wide classification that encompasses cryptoassets. The Basel paper on prudential treatment of cryptoasset exposures refers to cryptoassets, which is defined therein as private digital assets that depend on cryptography and distributed ledger or similar technology.