Stablecoin issuer / redeemer in Bahamas
Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.
Stablecoin issuer is conditionally permitted in Bahamas with a local entity, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- Mandatory compliance with AML/CFT under DARE Act Part III, Sec. 33-35 (KYC, risk assessments, reporting violations)
- Must comply with the Anti-Terrorism Act 2018 (ATA) and Financial Transactions Reporting Act 2018
- Ongoing reporting to SCB; no expansion of services without re-approval
- Appointment of MLRO (Money Laundering Reporting Officer) and compliance officer subject to SCB fitness/propriety checks
Key Restrictions
- Must incorporate as an International Business Company (IBC) in The Bahamas with registered office/agent
- Must appoint local compliance officer, directors, and senior management subject to SCB fitness/propriety evaluation
- Stablecoin issuance specifically regulated under DARE Act Sections 5, 15, 33, and Section 49 (reserve backing and audit requirements)
- No expansion of service scope (e.g., new stablecoin types) without SCB re-approval
- Capital minimum ranges from $150,000 to $500,000 (assessed case-by-case by SCB based on business model and risk)
Key Risks
- DARE Act 2024 is recent legislation; regulatory interpretation and enforcement patterns are still developing
- Capital minimum is case-by-case — may be set higher for stablecoin issuers given reserve custody and redemption obligations
- Reserve audit requirements under Section 49 could impose significant operational costs
- SCB approval timeline is not fixed, creating uncertainty for market entry planning
- Foreign-issued stablecoins' permissibility for local use is not explicitly addressed in the available facts — regulatory gap
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
The Digital Assets and Registered Exchanges Act (DARE Act) was originally enacted in 2020 and subsequently amended, including by the Digital Assets and Registered Exchanges (Amendment) Act, 2024. It regulates token issuance, exchanges, custodians, stablecoins (with reserve backing and audits under Section 49), NFTs, staking, DeFi platforms (Sections 5, 15, 33), and requires AML/CFT compliance (Sections 18-21, 33-35).
The Digital Assets and Registered Exchanges Act (DARE Act) was originally enacted in 2020 and subsequently amended, including by the Digital Assets and Registered Exchanges (Amendment) Act, 2024. It regulates token issuance, exchanges, custodians, stablecoins (with reserve backing and audits under Section 49), NFTs, staking, DeFi platforms (Sections 5, 15, 33), and requires AML/CFT compliance (Sections 18-21, 33-35).
DARE Act 2024: Core law (Parts II/III, Sec. 9, 18-21, 33-35); available via SCB website: https://www.scb.gov.bs/legislation/.
AML/KYC: Mandatory compliance with AML/CFT, including risk assessments, reporting violations, KYC procedures; governed by DARE Act (Part III, Sec. 33-35), Comprehensive Review Update Policy, Digital Assets and Registered Exchanges Rules, Anti-Terrorism Act 2018 (ATA), Financial Transactions Reporting Act 2018 (FTRA), Proceeds of Criminal Activity Act.
Local presence: Incorporation as an International Business Company (IBC) required, with a registered office/agent in the Bahamas; appointment of local compliance officer, directors, and senior management subject to fitness/propriety evaluation.
Capital: Minimum requirements vary from $150,000 to $500,000 (exact amount assessed case-by-case by SCB based on business model and risks).
Submit to SCB: Complete application with fees ($3,000 application fee, $10,000 annual fee, plus others); SCB reviews for compliance.
Incorporate legal entity: Register an IBC via Registrar of Companies (submit incorporation documents/fees; IBC Act 2020 applies).
Prepare documents: Business plan, proof of capital, director/shareholder details (fitness/propriety checks for directors, CEO/CFO/COO, compliance officer, MLRO, key shareholders), AML/KYC policies, governance/risk management frameworks.
Secure local elements: Registered office/agent, appoint compliance officer.
Approval and ongoing: SCB authorizes specific services; no expansion without re-approval. Timeline not fixed but involves comprehensive evaluation.
SCB Guidance: "The Bahamas' Approach to the Regulation of Digital Asset Businesses" (PDF): https://www.scb.gov.bs/wp-content/uploads/2023/04/The-Bahamas-Approach-to-the-Regulation-of-Digital-Asset-Businesses.pdf.
Securities Commission of The Bahamas (SCB): Oversees digital assets under DARE Act. https://www.scb.gov.bs/
Crypto firms need Securities Commission of The Bahamas (SCB) approval under the Digital Assets and Registered Exchanges (DARE) Act 2024 for activities like token issuance, exchanges, custody, or staking.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — stablecoin issuance is regulated under the DARE Act 2024 and requires SCB licensing as a digital asset business, incorporation as an IBC with local presence, compliance with reserve backing and audit requirements (Section 49), case-by-case capital minimum ($150k–$500k), and full AML/CFT obligations; the permissibility of foreign-issued stablecoins for local use is not explicitly addressed in available sources.
Questions this verdict aims to answer
- What e-money or banking license is required to issue?
- What reserve composition, segregation, and audit rules apply?
- What redemption rights must be granted to holders?
- Are foreign-issued stablecoins permitted for use locally?