Bahamas -- Stablecoin Regulations Regulatory Overview

The regulatory framework for stablecoins in The Bahamas is primarily governed by the Digital Assets and Registered Exchanges Act, 2024 (DARE 2024), administered by the Securities Commission of The Bahamas (SCB), which classifies stablecoins as a specific category of digital assets requiring registration as Digital Asset Businesses (DABs).[1][2][3][4]

Classification

Stablecoins are treated as digital assets pegged to reserve assets (e.g., fiat currency or commodities), distinct from e-money (regulated by the Central Bank under the Payment Systems Act, 2012) or securities (unless they exhibit investment contract features).[3][4][5] They are not explicitly classified as payment tokens but are subject to bespoke rules under DARE 2024 Section 49, excluding non-fungible tokens (NFTs) unless used for payments or investment.[3][4]

Reserve Requirements

Issuers must maintain full backing by approved reserve assets (flexible set, including those approved by SCB), disclose reserve composition, valuation factors, stabilization mechanisms, and undergo regular audits to ensure the peg.[1][2][3][4] SCB can halt or delist non-compliant stablecoins.[3]

Issuer Licensing

Stablecoin issuers qualify as DABs and must register/license with SCB, submit a whitepaper, comply with AML/CFT/CPF (Section 33), segregate customer assets, meet regulatory capital (Section 11), and report liquidity events.[1][2][3][4][5] Issuance without compliance is prohibited.[3]

Redemption Rights

Redemption follows the issuer's terms and conditions, approved by SCB, with policies detailed in the whitepaper.[4]

Algorithmic Stablecoin Rules

Issuance of algorithmic stablecoins is expressly prohibited to prevent risks like Terra's UST collapse.[1][2]

CBDC Interaction

No direct interaction specified; CBDCs (electronic fiat representations) fall under Central Bank of The Bahamas regulation via the Payment Systems Act, 2012, separate from SCB's DARE framework.[5] SCB collaborates with the Central Bank and Financial Intelligence Unit.[3]

Key legislation: DARE Act, 2020 (foundation, updated by DARE 2024 on 30 July 2024); Financial and Corporate Service Providers Act (FCSPA); DARE AML/CFT rules.[1][4][5] For full texts, refer to official SCB resources (e.g., scb.gov.bs). Framework evolved post-FTX/Terra to enhance transparency and investor protection.[2][4]