The Central Bank of The Bahamas (CBOB) stated it expects all nine of the payment service providers (PSPs) authorized to distribute Sand Dollars to be fully interoperable by this week. It added it is finalizing the technical integration of the digital currency with commercial banks.
The CBOB noted that those payment providers – or authorized financial institutions that have already adopted the Central Bank application into their platforms – have already satisfied interoperability, while other institutions which are using proprietary apps are expected to meet a March 31, 2021 deadline.
“The Central Bank expects to imminently complete the technical integration of the digital infrastructure with the commercial banking system. This will establish links between wallets and bank deposit accounts, through the Bahamas Automated Clearing House (BACH) and allow the transfer of funds in both directions,” the bank stated in a notice.
“As participants in the BACH, commercial banks also play a direct role, as the respective online wire transfer platforms are being updated to accommodate these transactions. The BACH has established protocols to be followed for such updates.”
Interoperability means that businesses and individuals would be able to send and receive funds with any other digital wallet once the transaction is in Sand Dollars, the bank noted.
The bank also intends to strengthen the existing legislative framework under which PSPs operate through the Central Bank (Electronic Bahamian Dollars) Regulations, 2021, which seeks to, among other things, safeguard the security of the financial market infrastructure and the financial integrity of digital currency transactions.
“Under the proposed regulations, the Central Bank would be able to vary wallet limits over the course of time, particularly to meet the evolving transactional needs of account holders. In all cases, including for Tier I accounts, the bank will be obligated to vary minimum due diligence standards and access levels, as international standards and best practices on AML/CFT/CPF (anti-money laundering/countering the financing of terrorism/countering proliferation financing) evolve,” CBOB stated.
“There are no restrictions on persons under 18 years of age obtaining wallets. Minors may obtain wallets with the assistance and consent of a parent or guardian by the execution of requisite documents during the onboarding stage. KYC (know your client) protocols would extend to the parent or guardians as sponsors of the accounts. The bank is aware that challenges may arise with minors having the requisite means of identification. Therefore, wallet providers are encouraged to rely on the guidance set out in Section IV, A2 of the bank’s AML/CFT/CPF guidelines and the streamlined requirements for account opening, provision of financial services and customer identification in Appendix B of those guidelines.”
The bank expects the consultation period for these new regulations to also end this week, after which its finalized regulations are expected to be issued on May 1.
At the core of the new Central Bank digital currency (CBDC) is financial inclusion, which the regulations also promote, the CBOB stated.
“The draft regulations promote universal access to digital wallets for all persons inside The Bahamas, whether these are in Tier I or Tier II. All residents and persons in The Bahamas can subscribe to these wallets, without reference to immigration or work permit status. More importantly, the draft regulations propose that all holders of Tier I and II wallets are entitled to make and receive payments within the CBDC environment without encountering transactions fees. The Central Bank has also approved customer due diligence procedures that allow the account opening process for supervised financial services to be concluded electronically,” the bank stated.
“PSPs are therefore using remote online tools to enroll wallet holders, including upload of biometrics and identity documentation. The Central Bank also purposes in the regulations that all retail payments providers adopt financial inclusion strategies that target all geographic parts of The Bahamas. Each wallet provider would be required to disclose to the bank its strategy to distribute payment services to residents in the central, southeastern and northwestern parts of The Bahamas. Providers would also be required to report periodically to the Central Bank on financial inclusion data, inclusive of details on gender and island of residency of wallet holders.”
The regulations also allow the Central Bank to directly intervene in any Family Island community or settlement, so that licensed businesses, churches and organizations have ensured access to basic wallet services.
“Such actions could begin to be advanced if it is observed that, for any reason, services are withdrawn by a PSP, or no such service has been made accessible by a PSP as of June 30, 2021,” CBOB stated.
“The bank would be empowered to designate a wallet provider to provide the services and the mobile application through which such services would be provided.”
The post Sand Dollar interoperability to be finalized this week appeared first on The Nassau Guardian.
source https://thenassauguardian.com/sand-dollar-interoperability-to-be-finalized-this-week/
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