Residents of the archipelago nation, the Bahamas, may soon be able to use digital assets including the world’s first central bank digital currency, or CBDC, to pay for taxes.
In a white paper on the future of digital assets released on Wednesday, the Bahamas’ Office of the Prime Minister said the government will begin to “enable payment of taxes using digital assets” by working with the country’s central bank as well as the private sector. In addition, the government plans to work on giving citizens access to crypto with the Bahamian dollar and encourage greater use of the country’s CBDC, the Sand Dollar.
“The Government will endeavour to ensure that digital assets are not used for the evasion of taxes or sanctions, and will seek to ensure compliance with all applicable Tax information exchange agreements (TIEA) and domestic laws and agreed OECD standards,” said the white paper.
In an effort to establish consistency across the branches of government, the Bahamas said it will form a digital asset policy committee as well as a digital advisory panel, or DAP. The former will be chaired by the prime minister — Philip Davis, at the time of publication — with the Financial Secretary, the Central Bank of The Bahamas governor, the executive director of the country’s Securities Commission, and the DAP chair serving as members. The advisory panel will consist of experts from the digital asset space “to keep digital assets and related digital developments, emerging trends, and associated risks constantly under review.”
“We have a vision to transform The Bahamas into the leading digital assets hub in the Caribbean and a global leader in the progressive regulation of businesses in this profoundly innovative space,” said Davis, according to Eyewitness News Bahamas. “While we recognize the extraordinary opportunities afforded by digital assets, we also recognize the risks, and thus we emphasize the importance of effective regulation.”
Related: Bahamas central bank prepares national Sand Dollar push for summer
In October 2020, the Bahamas became the first jurisdiction to fully roll out a CBDC. The digital currency, the Sand Dollar, was aimed at driving greater financial inclusion within the archipelago nation of more than 700 islands, roughly 30 of which are inhabited. Major crypto exchange FTX has expanded to the country by registering a Bahamian subsidiary in September 2021.