Tag: Bahamas

The Bahamas Regulator Denies Requesting FTX To Manufacture New Tokens

by Blockchain News

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The allegations made by FTX debtors have been rejected by the Securities Commission of The Bahamas (SCB), which also expresses worry over the fact that the inquiry has been hampered.

According to a statement that was made public on January 3rd, the SCB had to provide clarifications on significant inaccuracies that were made by John J. Ray III, the representative of the United States-based FTX debtors, in press and court files.

The Chapter 11 Debtors had made a public challenge to the Commission’s assessments of the value of digital assets that had been moved to digital wallets that were in the authority of the Commission in November 2022.

It stated that these assertions were based on inadequate information and that the debtors did not exercise due diligence by obtaining information from the Joint Provisional Liquidators. Additionally, it claimed that these statements were based on incorrect information.

During a court filing before the United States House of Financial Services Committee, the CEO of FTX, John J. Ray III, testified under oath and made public statements alleging that the Commission instructed FTX to mint a substantial amount of new tokens. This allegation was made in the statement.

The Chapter 11 Debtors have also said that the digital assets that are in the custody of the Commission and held in trust for FTX customers and creditors have been stolen. However, the Chapter 11 Debtors have not provided any evidence to support their assertions.

The Commission expressed its worry that its investigation is being hindered because the Chapter 11 Debtors are refusing to let the Court Supervised Joint Provisional Liquidators access to FTX’s AWS System. The Commission is concerned that this denial would jeopardize the inquiry.

The announcement made by the Bahamian securities regulator follows news from court filings made in December 2022, in which FTX lawyers claimed that the government of the Bahamas reportedly requested that the former CEO of FTX, Sam Bankman-Fried (SBF), issue a new cryptocurrency controlled by local officials. The announcement comes after the news was made public.

According to the original allegations, the Bahamas regulator allegedly requested that SBF issue new digital assets with a total value of hundreds of millions of dollars.

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Bahamas’ Sand Dollar CBDC Begins Facial-Recognition Rollout to Authorize Mobile Payments

by Blockchain News

Sand Dollar CBDC has continued to advance its usage and started addressing the issue of user authentication.

SunCash, a financial institution authorized to provide Sand Dollars in the Bahamas, announced on Thursday that it has partnered with PopID Inc software company to allow holders of the Bahamian Sand Dollar to use PopID’s PopPay platform to authenticate themselves.

It is the first time in history that consumers can now use the PopPay face verification platform to buy goods and services with a CBDC (central bank digital currency).

Bahamian citizens can now link their SunCash wallets to PopPay to enable face pay transactions using their Sand Dollars, a central bank digital currency in the Bahamas.

This will allow consumers to spend Sand Dollars at merchants (businesses) accepting SunCash payments using their faces for authentication.

Likewise, various local and global brands accepting digital Sand Dollars through the SunCash platform will be authenticated by PopPay.

PopPay’s technology allows merchants to verify customers’ identities with a facial scan. The technology links any payment method, including digital currencies, direct bank transfers, and debit/card cards, to the user’s unique facial characteristics.

Reports show that SunCash has over 55,000 active wallet holders, one-seventh of the population of the Bahamas, and more than 1,000 merchants accept the wallet.

Desmond Pyfrom, CEO of SunCash, talked about the development and said: “PopPay’s cutting edge technology provides a more consumer-friendly, seamless, and secure experience for SunCash’s users. With the integration of the PopPay platform into the SunCash App, Bahamian consumers can now quickly, efficiently, and safely use the digital Sand Dollar to purchase food and other products even if the consumer does not have a functional smartphone or an internet connection.”

Digitizing Retail Payments

Private digital currencies are storming financial markets, and as a result have prompted central banks globally to create their own, legally-backed digital tokens.

The Central Bank of The Bahamas issued the Sand Dollar– a digital iteration of the Bahamian Dollar, in October 2020.

With Sand Dollar, local consumers can receive and make payments electronically from a digital wallet using either their smartphones or a physical payment card they can manage via merchants across the nation.

Residents can open digital currency accounts, store the CBDC in an e-wallet approved by the central bank and use it for payments. The records collected during daily operations, like income and spending information, can support applications for micro-loans.

An IMF FinTech report showed that in late 2021, the number of active Sand Dollar wallets was about 20,000 in a population of about 400,000. 

Image source: Shutterstock

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Mastercard Tapped to Issue Prepaid Cards Linked to Bahamas’ Central Bank Digital Currency

by Blockchain News

The Central Bank of The Bahamas, Island Pay local mobile payment service provider, and Mastercard have partnered to give the people of Bahamas greater flexibility when transacting with the Sand Dollar – Bahamas’ central bank digital currency. The new program is designed to enable citizens to instantly convert the central bank digital currency into cash (traditional Bahamian dollars). They can even pay for goods and services anywhere, as Mastercard prepaid cards are accepted on the Islands and across the globe.

Mastercard technology, combined with Island Pay’s digital platform and wide merchant acceptance, has the potential to assist in modernizing the overall payment systems and reducing the operational distribution cost of cash in the country.

John Rolle, the Governor of the Central Bank of the Bahamas, said:

“We welcome this approach to combining digital currency use with access to foreign currency and other payment outlets. The Central Bank of The Bahamas will continue to encourage fintech developments that tie into the Sand Dollar infrastructure while allowing us to satisfy the best global practices for regulation of the space.”

This CBDC initiative is in line with Mastercard’s program, as the payments giant aims to work with central banks. Last September, Mastercard created a virtual testing program that allowed central banks to test the use-cases of their CBDCs.

Raj Dhamodharan, EVP of Digital Asset & Blockchain Products & Partnerships at Mastercard, said: “This partnership is an example of how the private and public sector can rethink what’s possible while delivering the strongest levels of consumer protection and regulatory compliance. We’re creating a lot more possibilities for governments, shoppers and merchants, allowing them to transact in an entirely new form of payment.”

The Role of Mobile Phone-Based CBDC

Last October, Bahamas became the first country to launch Central Bank Digital Currency, a digital version of the traditional cash (Bahamian dollar). The Central Bank of The Bahamas made the sand dollar (the national digital currency) to be transferable via mobile phones, making the CBDC easy to use for the local citizens. The digital currency is usable even while offline, thus making it a good payment option for residents without an internet connection.

Bahamas’ central bank pinpointed the offline availability as a crucial feature when designing and developing the Sand Dollar. The feature is essential as the archipelagic State is prone to natural disasters. For example, when Hurricane Dorian hit the island in September 2019 and destroyed billions worth of property, most people’s internet connection was obliterated.

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Tether’s Bank Deltec Says Stablecoin Is Fully Backed by Reserves

by Coindesk

Tether Ltd.’s Bahamas-based bank, Deltec, said on Friday that the company’s stablecoin is fully backed by reserves, downplaying resurgent fears about the cryptocurrency’s integrity.

“Every tether is backed by a reserve and their reserve is more than what is in circulation,” Gregory Pepin, Deltec Bank CEO, said on the latest episode of the Unchained Podcast hosted by journalist Laura Shin. “We can see it first hand, so I can confirm that.”

Tether Ltd., the company behind the tether (USDT) stablecoin (which has a value linked to the U.S. dollar on a 1:1 basis), has been long accused of lacking of transparency about the coin’s backing. Indeed, a Tether lawyer said in 2019 each USDT was only about 74% backed by fiat equivalents.

USDT’s market capitalization has grown from $4 billion to an astonishing $24 billion in the past 12 months. Reserves are said by Tether on its website to include “traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.”

Fears about a shortage of backing resurfaced last week after a Medium post cited the discrepancy between the amount of tether issued during the nine months to September 2020 and the funds held at Bahamas-based domestic banks as evidence of a massive shortage of reserves at Tether.

“There weren’t nearly enough dollars in all the domestic banks in the Bahamas to back the Tethers that were floating around in the crypto market,” the anonymously penned post stated, citing Bahamas central bank figures.

Pepin, however, refuted that claim, stating that Deltec is not a domestic bank and doesn’t have an authorized dealer license, which is needed to hold Bahamian dollars in cash and deposits.

“We cannot take domestic customers and we cannot hold domestic Bahamian dollars. So that report is actually not relevant,” Pepin told Shin. “And actually, if [the post’s author] took a little effort to go and dig a bit about the size of the Bahamian market of banking, [they] would have found out that the entire mass of banks have around $200 billion in assets, I believe. And we are a part of that.”

Pepin also offered clarity on the bank’s recent disclosure of bitcoin purchases for clients, which triggered rumors that it was doing so on behalf of Tether. Both the bank and Tether denied the claim last week.

“We have a very competent and well-respected investment team. And as part of their portfolio education for customers, they actually did an allocation in bitcoin on behalf of those customers,” Pepin said, noting that the 50-year old bank’s customers range from asset managers to high-net-worth individuals.

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