Bahamas Prime Minister, Phillip Davis, has tabled a whitepaper in the national assembly as the country mulls allowing Crypto tax payments. Dubbed “a vision and a framework to guide digital asset policy in The Bahamas,” the bill envisages the Caribbean archipelago as a Crypto haven with the Department of Inland Revenue accepting Bitcoin and the Sand Dollar as tax receipts.
The whitepaper comes shortly after the launch of the Sand Dollar, a pioneer Central Bank Digital Currency (CBDC). The new plan is consistent with the mission of Prime Minister Phillip Davis to transform the Bahamas into a global pacesetter in the digital assets space.
Exploring New Opportunities in the Digital Space
The Bahamas intends to explore and leverage the immense opportunities in the digital space such as DeFi, NFTs, and Stablecoins. This move follows in the footsteps of countries such as the UAE, which is on course to establishing a framework for supporting and regulating decentralized finance (DeFi) operations.
The new bill also aims to continue attracting virtual assets services providers (VASPs) into the Bahama by offering an unmatched conducive environment to nurture their growth and development.
Some of the key parameters that the Bahamas is improving on to be the ideal VASPs destination include:
o Skills development to create competitive expertise for the digital industry
o Removing bottlenecks to make digital assets accessible and easily convertible in Bahamian dollars
o Incentivizing and promoting creativity and innovation in Crypto fintech
Promoting Economic Development
The whitepaper affirms that VASPs contribute positively to the economic development of the Bahamas. Digital fintech companies invest in the economy by funding infrastructure and social projects and creating employment for the public.
For VASPs, the Bahamian government notes and appreciates the effort of VASPs in alleviating the effects of Covid 19 wiped off a significant proportion of the GDP of the tourism-dependent economy. Additionally, VASPs helped mitigate the devastation of hurricane Dorian which destroyed property worth $3.4 billion and left 74 people dead.
The government, therefore, aims to offer a conducive environment by “progressive regulation” of VASPs to accelerate Blockchain and crypto adoption in the country and promote economic development.
Recognizing Risks in the Digital Space
The digital space has a lot of risks for investors, adopters, and governments. There are different approaches to managing these risks, such as Argentina’s CNV sandbox program for digital projects.
The planned progressive regulation aims to discourage bad actors from setting up VASPs in the Bahamas. Adopting a policy for fairness and accountability for Cryptocurrencies and Blockchain projects will address trust fears and drive the adoption of digital assets.
When the Parliament of the Bahamas approves the bill as outlined in the whitepaper, the Bahamas will have one of the most progressive regulatory policies for digital assets globally.