At the Bahamas Blockchain and Cryptocurrency Conference last week, the Bahamian deputy prime minister, K. Peter Turnquest, announced the Caribbean nation intends to create a national digital currency and use blockchain technology to reduce corruption.
Turnquest, now in his second year in office, made a campaign promise to integrate blockchain into the Bahamian government in order to weed out corruption and to bring efficiency to current operations. There is also the hope that blockchain technology can reduce the cost of doing business in the Bahamas.
"Digitization of our government and financial services complements both our ease of doing business initiatives and our digital Bahamas framework. As a first step in our ease of doing business initiative, we would have moved to a new online interface for start-up companies registering their business for the first time in the Bahamas," Turnquest said.
Because the Bahamas is a nation of over 700 islands and cays, access to a bank may mean traveling by sea or air a great distance for many in the nation. Turnquest stressed the importance of a fully digital payment service:
"A digital Bahamian currency is especially important for the many family islands as they have seen many commercial banks downsize and pull out of their communities, leaving them without banking services. As an island nation, where transportation can be an inconvenience for many, especially the elderly, and costly, we must offer financial services digitally and securely."
While many governments have indicated – in some shape or form – interest in integrating blockchain technology into their existing processes, the Bahamas' decision to create a central bank digital currency (CBDC) places the archipelago in rare company, among countries like Norway, Thailand, and the United Kingdom.
"The Caribbean is a prime location for passport investments, particularly from the Middle East, as high net worth individuals look to secure their families' access to the US and the British Commonwealth, along with other financial benefits," Adam Grist, CEO of Searched, told ETHNews.
"As know your customer systems continue to improve with their own blockchain solutions, the whole passport application process can not only be more secure and provide great transparency around the deal structuring, but it could become significantly faster and easier to participate in. Middlemen and agents can be removed from the equation, along with their significantly high referral fees, as a suitable KYC process takes over for lead qualification. As a result, investment could be secured on a more consistent basis with higher returns for the government of the Bahamas and surrounding Islands," Grist said.
While by no means the most corrupt region, charges against key previous administration officials have caused the nation's ranking in the Transparency International Corruption Perceptions Index to drop from its once vaunted position of most trustworthy Caribbean nation.
"There is a constant threat of corruption, not only regarding the individuals applying and securing the passports, but actually within the governments themselves. The benefit for the Bahamas in moving to cryptocurrencies and securing their passport investment schemes on the blockchain is the constant, real-world use of the currency supporting its growth and long-term value through high-value investments," Grist said.
With blockchain technology still in its infancy, full integration could take a decade or more. However, the potential that the technology offers paired with enthusiasm about becoming a blockchain hot spot puts the Bahamas in a prime position.
"Using technology and single points of contact, we're able to eliminate a lot of the human element that facilitates corruption. So, when we talk about applying for government services, if we have a single portal for entry and all of the processing being done behind the scenes – either through electronic data interchange or through human facilitation – we can eliminate that point where, as we Bahamians call it, you have to tip somebody in order to get service," Turnquest stated.