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."

The central bank said technical developments to extend proprietary wallet access to the Bahamas Automated Clearing House (ACH) via the Sand Dollar infrastructure were completed. This facility is set for release to the Sand Dollar digital wallet providers at the end of May. 

The first iteration of Wallet 2.0, which will permit user self-activation, progressed to beta testing, with a general release scheduled for the middle of the summer.

The bank completed developments to extend the ACH top-up, redemption access to the proprietary Sand Dollar-enabled digital wallets. Digital wallet providers will be able to begin activating this customer feature by the end of May 2023. Sand Dollar wallet holders will be able to use this feature once provided with a top-up address through their respective digital wallet provider. 

All mobile wallet account holders will be able to use the third-party transfer features within their online and mobile banking applications to send funds to their Sand Dollar accounts. 

While all wallets will be able to receive top-ups from bank accounts, only account holders who have successfully undertaken enhanced KYC for Tier II (individuals) and Tier III (businesses) statuses will be permitted to redeem Sand Dollars through linked bank deposit accounts. 

In June, the central bank will start beta testing of the white-labelled Wallet 2.0 for automatic self-onboarding of users to lower KYC (Tier I) wallets. This app is targeted for public release in August 2023. It will provide users with access to a branded version of the central bank-developed app linked to the Sand Dollar Authorised Financial Institution of choice selected by the individual. Wallet 2.0 also provides merchant services features, which are scheduled for a later 2023 release date.

The DARE Bill 2023 encompasses a "comprehensive range of digital asset activities and establishes appropriate protection mechanisms for the registration and ongoing supervision of operators that align with prevailing international standards."

The new Bill represents "an even greater focus on consumer and investor protection, robust risk management as well as market development and innovation. Furthermore, the Bill explicitly addresses staking services in the context of international standards, making it among the first legislation of its kind."

The Guidelines provide Supervised Financial Institutions with an overview of the Central Bank’s expectations for engagement in digital asset activities and identification of accepted best practices for effective risk management.

The deadline for comments is 27 February 2023.