Central Bank places moratorium on money transmission firms

The Central Bank of The Bahamas (CBOB) has placed a moratorium on accepting applications for any new non-bank payment service providers (PSPs) and money transmission businesses (MTBs) so as to not oversaturate the market, it announced last week.

The announcement comes ahead of the rollout of the bank’s first digital fiat currency, Project Sand Dollar, which is expected to be piloted on Exuma before the end of the year.

CBOB said it will review its position on suspending the acceptance of applications at the end of 2020 and will use the time to monitor adjustments among existing licensees to ensure orderly, sustainable developments in the payments and money services space.

“As of November 29, 2019, the central bank had licensed three PSPs and was reviewing two other applications. The number of MTBs as of this date stood at five, with services provided through a network that includes 23 agents. The moratorium does not affect approvals of new MTB agencies,” the bank said in a statement released Friday.

“Collectively, payment services providers and money transmission businesses are expected to become active players in the provision of electronic and digital money services. Commercial banks and credit unions are also positioned to play increasing roles.”

CBOB has been working toward a more digitally inclusive system for years now as it aims to reduce The Bahamas’ dependency on cash.

Earlier this year when CBOB formally announced its new digital currency, NZIA Limited – the company engaged to build the digital currency infrastructure – revealed that Bahamian technology startups would provide the front end solutions for Bahamians to access the Central Bank Digital Currency (CBDC).

“The central bank licenses and regulates payment service providers operating in and from within The Bahamas, under the Payment Systems Act, 2012 and the Payment Instruments (Oversight) Regulations, 2017. Money transmission businesses are licensed and regulated under the Banks and Trust Companies Regulation Act, 2000; the Banks and Trust Companies (Money Transmission Business) Regulations, 2008; and provisions under the Central Bank of The Bahamas Act, 2000,” CBOB noted.

“The central bank is exercising its powers under sections 5 and 6 of the PSA and Regulation 4(3) of the Banks and Trust Companies (Money Transmission Business) Regulations. These empower the central bank to implement policies that are in the interest of the overall stability of the financial system; controlling risks and promoting the safety and efficiency of the payment systems. The moratorium is intended to allow the development and introduction of new payments services by non-bank providers in a non-saturated environment.”

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Paige McCartney

Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas. Paige started working as a business reporter in August 2016. Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News

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