Wednesday 25 May 2022
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IMF recommends the Bahamas ‘accelerate its education campaigns’ on CBDC

The International Monetary Fund, or IMF, has turned its attention to the Bahamas’ central bank digital currency (CBDC), the Sand Dollar, and suggested additional regulatory oversight and education.

Reporting on a consultation with the Caribbean nation on Monday, the IMF said its executive directors “recognized the potential of the Sand Dollar to foster financial inclusion” and recommended the Central Bank of The Bahamas “accelerate its education campaigns and continue strengthening internal capacity and oversight.” The consultation was somewhat of a departure from several of the IMF’s previous warnings to many countries against the adoption of digital assets — but many of those did not include CBDCs.

The recommendation came following the conclusion of an Article IV consultation in the Bahamas last Wednesday. According to the IMF, during such a consultation, a team of economists visits a country “to assess economic and financial developments and discuss the country's economic and financial policies with government and central bank officials.”

In addition to recommending financially educating the public in The Bahamas, the IMF hinted at the importance of “robust supervisory and regulatory framework” for digital assets. During an interview at SALT’s Crypto Bahamas conference in May, The Bahamas Prime Minister Philip Davis told Cointelegraph that the region has a regulatory regime in place that will enable crypto businesses to operate within its jurisdiction. Davis’ office also said in April the government would “enable payment of taxes using digital assets” by working with the central bank as well as the private sector.

Related: IMF urges El Salvador to remove Bitcoin's status as legal tender

To date, The Bahamas and Nigeria are the only two countries to have officially launched CBDCs, but other nations including China have been piloting digital currencies. On Friday, the Bank for International Settlements Monetary and Economic Department said a survey of 81 central banks conducted in 2021 suggested 90% were “engaged in some form of CBDC work,” and more than 60% were “likely to or might possibly issue a retail CBDC in either the short or medium term.”

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