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Digital Payments

In further preparation for national adoption and public education, which is planned to increase over the second quarter of 2021, the Central Bank of The Bahamas developed and circulated draft Regulations for the digital currency for public consultation on 15 February 2021: Central Bank (Electronic Bahamian Dollars) Regulations, 2021. The draft Regulations are intended to enhance the existing legislative framework governing Payment Services Providers (PSPs), specific to their provision of central bank digital currency (CBDC) linked services. These include specific obligations to safeguard the security of the financial market infrastructure, affirmed obligations around the financial integrity (AML/CFT) of digital currency transactions, and intensive focus on financial inclusion and consumer protection. After the consultation period closes on 31 March 2021, the Bank will finalise the Regulations for issuance by 01 May 2021. The consultation package is available on the Bank’s website at:

This policy paper provides a synopsis of key consumer-centric provisions provided under the draft Regulations. The terms “PSPs”, and “wallet providers” are used interchangeably.

The Central Bank began the gradual national release of the Bahamian digital currency in October 2020. Since then, participating financial institutions have worked to integrate their proprietary mobile applications (apps) to the Sand Dollar infrastructure. As of mid-March, nine PSPs––the Authorised Financial Institutions (AFIs)––have completed cybersecurity assessments of their technology systems and have been cleared to distribute the CBDC. That is, four money transmission businesses (MTBs), three payment services institutions, one commercial bank, and one credit union. These institutions are either enabled to offer Sand Dollars through their proprietary mobile wallets or through the Central Bank developed app.

The Central Bank is working with PSPs to achieve the interoperability of all proprietary mobile apps. Interoperability means that businesses and individuals would be able to send and receive funds with any other digital wallet once the transaction is in Sand Dollars. Payment providers that adopted the Central Bank app already satisfy interoperability, while institutions that are using proprietary apps are expected to meet a deadline of 31 March 2021.

The Central Bank expects to imminently complete the technical integration of the digital infrastructure with the commercial banking system. This will establish links between wallets and bank deposit accounts, through the Bahamas Automated Clearing House (the ACH), and allow transfer of funds in both directions. As participants in the ACH, commercial banks also play a direct role, as the respective online wire transfer platforms are being updated to accommodate these transactions. The ACH has established protocols to be followed for such updates.

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