The Central Bank of the Bahamas has announced the publication of its Digital Assets Guidelines 2023, which came into effect on December 12, 2023.
As stated in a press release by the Central Bank of the Bahamas, these guidelines aim to provide supervised financial institutions (SFIs) with an understanding of the central bank's expectations regarding exposure to digital asset activities. They also outline risk management best practices.
"SFIs should take a risk-based approach, factoring in their board-approved risk appetite and their resources. Where there may exist additional risks posed by digital assets, SFIs should ensure that the risks are promptly identified, measured, and mitigated," stated the Central Bank in the press release.
The Digital Assets Guidelines document indicates that these guidelines incorporate principles from the Basel Committee on Banking Supervision’s "Prudential treatment of cryptoasset exposures." Specifically, they detail requirements and expectations related to governance and risk management; activities such as issuing digital tokens; operating as a digital asset service provider; outsourcing to digital asset service providers; and conducting business on behalf of clients investing in digital assets. The guidelines also address prudential treatment of digital assets; guidance and requirements on risks; and central bank reporting requirements. These requirements and expectations apply to all SFIs exposed to risks from digital asset business activities, according to the guidelines.
Consultations with industry representatives were conducted on a draft version of these guidelines, as per another press release from the Central Bank of the Bahamas. The central bank received substantial general feedback along with section-specific comments.