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The Bahamas to allow tax payments in digital assets

The Bahamas wants to become the digital currency leader in the Caribbean, with the government unveiling a white paper that charts out its plans for the digital asset future of the island nation. It includes allowing citizens to pay their taxes in Bitcoin and the country’s central bank digital currency, the Sand Dollar.

The Bahamas is already a world leader in digital assets, becoming the first country globally to launch its central bank digital currency (CBDC). In a recent white paper, Prime Minister Phillip Davis revealed that the Sand Dollar was just the beginning, and he has grand plans for the archipelago nation.

Through a comprehensive policy framework, PM Davis intends to explore new opportunities in the digital asset space such as stablecoins, DeFi, and NFTs; attract virtual asset service providers (VASPs) through positive regulations; encourage innovation in fintech and identify emerging technologies; develop the necessary skills and expertise for the emerging sector; and make digital assets easily accessible in Bahamian dollars.

The Bahamas has been reaping the benefits of being a safe haven for VASPs, with the white paper noting that several companies have set up shop in the country.

“These businesses will provide much-needed employment as well as investment in local infrastructure and social projects, resulting in a positive economic impact for the nation,” according to the white paper, noting that these firms have greatly helped mitigate some of the adverse effects of COVID-19 and Hurricane Dorian which took 74 lives and destroyed over $3.4 billion in property, a quarter of the nation’s GDP.

Addressing parliament on the white paper, the Prime Minister stated that he intends to lead the region in blockchain advancements, as reported by one local outlet.

“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,” PM Davis told legislators.

The Prime Minister also noted that his government recognizes that digital assets come with their own set of risks, “…and thus we emphasize the importance of effective regulation. We will attract the best companies and keep out bad actors. Digital assets companies associated with our jurisdiction must operate fairly and in the interests of customers.”

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