The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Businesses wanting to use the Bahamian digital currency must undergo "the more stringent" Know Your Customer (KYC) due diligence that is required for traditional accounts, it was revealed yesterday.

Kimwood Mott, the Central Bank's project manager for implementation of the digital currency, known as the Sand Dollar, said there were no restrictions limiting Bahamians and residents to just one digital wallet. However, if entrepreneurs wanted one wallet for themselves and another for their company, they would have to undergo two separate KYC processes.

“If users are having a single wallet, the KYC requirements only apply to the wallet," Mr Mott explained. "But there is nothing limiting somebody to having just one wallet. If you want to have multiple wallets, with one for your business and one for your person, then like with any other financial institution, you would then have to present yourself as yourself and, as well, your business as your business.

"Because businesses are entities unto themselves, therefore they would have to go through more stringent KYC - and enhanced KYC - as a business. You yourself can decide on whether or not you want to operate as a tier one or a tier two, and follow the KYC requirements that will be applied to those particular tiers.”

There are three Sand Dollar tiers for KYC. The first is the “simplified level one”, where the accounts are low value accounts under $500, and with a maximum transaction limit of $1,500 as either the sum of payments or receipts.

The second tier is the “regular level two” for medium value accounts with a maximum balance of $5,000, and a maximum transaction limit of $10,000. The third tier is the “enhanced level three” for high value business accounts with a maximum balance of $8,000, and a maximum transaction limit of $20,000 per month or just under 15 percent of annual revenues - whichever is greater.

Applicants at this latter level are asked to comply with enhanced due diligence measures issued by the Central Bank.

Mr Mott added: "If somebody wants to operate their business account, and make personal transactions through that business account, by all means they are free to do so. But then establishing a relationship with the financial institution as a business, that would actually call for the business KYC.”

Cleopatra Davis, head of banking at the Central Bank, said: “As an individual if you are a small business person, like a straw vendor or fisherman or trading as, you also have the option to have an individual account for your small business.

"Then it will follow the guidelines to the individual account, and you can also have your separate individual account. But if you want to move into that business category purely because of the parameters around it regarding limits, then there are additional KYC requirements.”