4 min read

Crypto Exchanges& Regulation in The Bahamas

Top exchanges in The Bahamas by Coincub criteria
Article review author
Jonathan Lea
The Bahamas head image

Crypto Country Rating: 8.5/10

8/10
Institutional acceptance
Increasing guidelines promoting confidence in sector
7.5/10
Exchanges & Wallets availability
Leading exchanges available
8/10
Government regulation
Positive moves to regulate crypto and develop blockchain
5/10
Defi acceptance
Not significant
6.5/10
Financial services
Too small for wide domestic ICO community
7.5/10
Transparency
Progressive plans for licensing and regulation around operation and custody
7/10
Spending crypto
Pay taxes in crypto but spending on little else
8/10
Banks activity in crypto
Banks mostly overseas, positive on facilitation

Introduction

 The Bahamas has long been a destination for mixing glamour with low taxes and being a hub for the financial movers and players seeking to maximize their assets. It has over 400 banks, branches, or affiliates of overseas financial powerhouses and some eight of its homegrown ones making it a truly global banking hub. This position is no doubt to be maintained according to a statement by the country’s Prime Minister proposed that the Bahamas could also become the leading digital asset hub in the Caribbean at a recent crypto conference in Nassau. At the time of writing there has been a worldwide collapse of crypto prices – but such dramatic drops and recoveries have happened before, of course.

A formal white paper points up the country’s digital asset strategy for the next few years which is to be achieved in varying degrees of collaboration and consultation with some heavyweight financial hitters such as the Bank for International Settlements (BIS), the Financial Action Task Force (FATF), the Organization for Economic Cooperation and Development (OECD). Enabling residents to pay taxes in digital assets is one clear-cut proposal, so it’s safe to say the Bahamas, is a crypto and blockchain advocate. Worth knowing that the Central Bank of The Bahamas is one of the most progressive in terms of creating a central bank digital currency (CBDC). The Sand Dollar (cute!) as it is nicknamed was launched in 2020 and the Bank is working hard for it to gain wider acceptance and usage in the financial sector. Whether the Bahamas follows El Salvador and the Central African Republic in designating Bitcoin as legal tender is a whole step further down the road and it seems unlikely – especially at present.

Tax:

Part of the Bahamas crypto strategy mentioned above is the allowing of citizens to pay taxes using digital assets. Although this isn’t perhaps as radical as it sounds as the country is strongly promoting the usage of its own CDBC – and getting people to pay taxes always cheers governments up. The taxation of residents’ gains on trading crypto appears to be part of normal income tax reporting without specific crypto tax guidance. 

Initial Coin Offerings – ICOs

Initial Coin Offerings have gained mainstream acceptance around the world, but in the Bahamas, ICOs Initial Coin Offerings have been assessed fully by the Central Bank which sets out the criteria for sponsors and promoters of ICOs. Non-objection of the Central Bank must be obtained and if the ICO falls outside the scope of the regulated framework, the Central Bank may still object to the ICO on the basis that it poses an unmanageable risk to the SFI or The Bahamas.

Blockchain community

Despite its size and population Bahamas is an avid blockchain and crypto economy with many specialized courses available for the study of both. Crypto start-up companies spring up regularly and many deem this evocative country to become another pint-sized crypto hot spot, along with Malta. A leading crypto derivatives exchange moved its headquarters from Hong Kong to the Bahamas in September 2021. More crypto companies are bound to follow especially after the Prime Minster’s futurist crypto vision for the country.

Transparency and security

Countries with firm regulatory guidelines inevitably fare better than crypto economies without and the Bahamas, perhaps recognizing this, has completed two pieces of legislation that should move the country forward. The Digital Assets and Registered Exchanges Act, 2020 (the DARE Act) and the Financial and Corporate Service Providers Act, 2020 (the FCSP Act) both add confidence to overseas digital assets services providers looking to locate there. Registration of exchanges and greater safeguards over the protection and custody of digital assets are important Coincub ranking initiatives.

In addition to standing Anti-money laundering and fraud laws, new legislation will regulate the issue and sale of digital tokens in the Bahamas, providing a framework for the regulation of flat exchanges, wallet services, and virtual asset service providers (VASPs) generally. Accordingly, several leading exchanges are or were considering moving to the Bahamas, at least up until the time of writing/

Helpful?
FAQ

New to crypto? Here’s our guide!

FAQ Image #1 01 Why Bitcoin? It seems like the buzz around Bitcoin just keeps growing. Bitcoin is a constantly evolving technology with a passionate community. What is it about the digital asset that makes it such a controversial topic and attractive investment?
FAQ Image #2 02 How to Get Started with Bitcoin It can be difficult to get past the technical jargon surrounding bitcoin (BTC) and other cryptocurrencies in order to figure out how you can buy and store them. Beginners can purchase Bitcoin, for example, on many exchanges using fiat currency like U.S. Dollar, Euro or British Pound.
FAQ Image #3 03 Blockchains 101 Blockchains are a type of database where data is stored in blocks that are chained together. As new data comes in, it is entered into a block, which is then chained to the previous block. The Bitcoin blockchain serves as a ledger that records every Bitcoin transaction in history.
FAQ Image #4 04 Bitcoin in the Real World Ok - you’ve found an exchange, bought your Bitcoin, and stored it safely. What’s next? By now you can buy just about anything with Bitcoin if you try hard enough, from Amazon gift cards to an old master painting. You can also convert your BTC to fiat with ATMs, an exchange, and more.

What people say about us

Aayush Bhatnagar JIO - Senior Vice President

Coincub is a novel crypto exchange aggregator that helps investors to compare different exchanges before taking their decision.

James Gillingham Co-Founder and CEO at FINXFLO

The most comprehensive analysis I found. Have a look, you might be surprised.

Jonathan Knegtel CEO Blockdata

Coincub looks dope! Nice one!