NASSAU, Bahamas – Bahamas Prime Minister Phillip Davis Wednesday said the move towards a digital transformation agenda will make The Bahamas more competitive on the global stage.
Prime Minister Phillip Davis (Photo courtesy of CARICOM)“Digital and financial inclusion have critical roles to play in the new economy. And that is as true for our financial systems as it is for our governmental systems,” Prime Minister Davis told the MasterCard sponsored Fintech Summi that is being held here under the theme “ Fintech as Enablers of National Digital Agendas”.
He told the delegates that even as tourism is the country’s number one industry, “we are equally proud of the second pillar of our economy: our financial services industry, which has also grown and evolved tremendously over the years”.
Davis said that as a result of the country’s “world-leading legislative framework, local expertise, and commitment to innovation, we have built the optimal environment for wealth generation and management.
“Our ability to adapt our regulatory framework to the most stringent global standards, while building a competitive financial services product that appeals to clients from around the globe, makes us the ideal jurisdiction for emerging Fintech opportunities.
“In fact, the very survival of our financial services industry hinges on our ability to innovate and adapt to emerging trends. The integration of Fintech is the next step in our continued evolution as a leading financial services jurisdiction.”
Davis said that as an independent country celebrating its 50th anniversary of political independence from Britain this year, The Bahamas believes digital technologies can play a large role in the new Bahamian economy that is emerging.
“Every country’s digital journey is unique, influenced by factors such as geography, access to financing, and human development. However, no matter the path taken, the final destination remains the same. We all find ourselves competing in a rapidly changing world that demands we get with the times or risk finding ourselves on the outside looking in.”
He said Nassau is working toward the digital transformation of businesses, societies, and governments with the government recording “tremendous success” with the launch of the MyGateway platform, which provides centralized online access to over 200 government services.
He said this platform is a central component of a wider government push to expand access to public services while improving transparency, strengthening auditing and control mechanisms, and enhancing security.
“If a government cannot embrace digitization within its own systems, how can it truly welcome the digital innovation that marks our modern era, government cannot rightly be said to have embraced digital innovations if its own systems are not a part of the wider digital ecosystem,” Prime Minister Davis said, adding “our digital transformation agenda will make The Bahamas more competitive on the global stage”.
He said regionally, the loss of correspondent banking relationships has created millions of unbanked people throughout Latin America and the Caribbean who are in need of solutions.
“We have faced our own challenges in The Bahamas as local banks have pulled out of less populated islands, leaving residents without a single financial institution to rely on.
“Many people are forced to travel by boat or plane to perform basic financial transactions. This reality, though regrettable, represents an opportunity to advance the uptake of financial technology and, in turn, promote greater financial inclusion across our archipelago. ”
Prime Minister Davis told the conference that in 2020, Nassau launched the world’s first Central Bank Digital Currency, the Sand Dollar, “as our homegrown solution for digital inclusion.
“We are now working with our Central Bank in conjunction with private sector partners to promote widespread adoption. We were later joined by Jamaica and the Eastern Caribbean Currency Union who both launched their own Central Bank Digital Currencies.
“As we work toward greater usage of these currencies, there remain millions of unbanked people across the Caribbean and Latin America who require urgent solutions,” Prime Minister Davis said, noting that “while each country in our region faces unique obstacles in the fight for greater financial inclusion, across the board lower-income, young, and less-educated citizens are the most likely to be financially excluded.
“As policymakers and industry leaders, we must take into account these vulnerable populations, if our efforts to promote Fintech as a force for democracy are to succeed.”
Davis said that some Caribbean countries, including his own, are well-positioned to serve as strategic industry hubs for digital assets enterprises doing business throughout the Americas. “We already have decades of experience as financial services centers, and we can rely on our expertise in international compliance and the regulation of financial systems to provide a well-regulated, business-friendly space for start-ups and existing digital asset enterprises seeking to expand.”
He said that the key to long-term success in the Fintech and digital assets space, however, is the development of an effective regulatory framework and that “ our Digital Assets and Registered Exchanges (DARE) Act is hailed as one of the most rigorous and effective frameworks in the world.
“The DARE framework reflects global best practices with an added touch of Bahamian innovation, positioning us a world leader in the regulation of digital assets. The legislation is comprehensive and provides clarity and oversight without stifling innovation. It is also highly responsive. We knew we needed an approach that was highly adaptive to keep pace with industry changes.”
Davis said recognizing the importance of staying ahead of the curve, his administration intends to pass a series of amendments to the DARE Act this year with the Digital Assets Registration and Exchanges Bill, 2023.
He said the revamped regime aims to encompass lessons learned globally since the introduction of DARE and to situate The Bahamas at the forefront of the rapidly evolving digital asset regulatory space, with an even stronger, more comprehensive regulatory framework.
“When put to the test by the unprecedented situation with FTX, our regulations ensured that immediate and effective action was taken to appoint joint liquidators and secure assets, which are now under the control of the Bahamian regulator.
“The lessons we learned in the wake of FTX will only strengthen our DARE framework in the long term and propel our digital assets sector forward. New amendments to the legislation include – among other things – measures to clarify the regulation of stablecoins, more robust investor and consumer protection mechanisms, and the regulation of staking for digital asset-related mining in The Bahamas.”
FTX’s collapse began in 2022, when a run on deposits revealed an eight billion US dollars hole in the company’s finances. It’s founder Bankman-Fried has been extradited to the United States, where he faces criminal charges.
Prime Minister Davis said that the Bahamas is innovating, not only in response to its own experiences and insights, but in anticipation of the direction that the industry is headed.
“As the Fintech sector evolves, we will continue to promote robust discussions with industry leaders as we prepare for the promising future ahead of us. :He said that The Bahamas will be hosting the “Digital, Decentralised, Disruptive”, D3 Conference from October 10-12 and the focus will be on deploying safe, responsible and ethical Fintech solutions; as well as the need to join forces to foster global digital innovation and introduce Web3 and digital assets into mainstream adoption.
