This publication recently sat down with the IFC's central bank governor to discuss topics ranging from digital currencies through to macroeconomic policy and how the jurisdiction has navigated economic turbulence.

The Bahamas has thrived economically because it has provided a “nexus” of business opportunities, services and sources of expertise. And new opportunities beckon from regions such as Latin America as the jurisdiction demonstrates its resilience, John Rolle, Governor of the Central Bank of The Bahamas, told this publication recently.

Rolle spoke to WealthBriefing on the sidelines of a London conference hosted by the Bahamas Financial Services Board.

Reflecting on how the Caribbean jurisdiction has recovered since the disruptions of Covid-19, Rolle said: “We have been resilient in how we have got back to where we are. And we have some capacity that’s not yet in use and there’s potential for further economic activity in the Bahamas.”

Holding the governorship since 2016, Rolle started at the central bank back in 1990, and had stints working with the International Monetary Fund in Washington DC as well as later working with the finance ministry in The Bahamas. 

“When you work in some of these regulatory roles, some of what you do is going to set the agenda,” he said.

Growth and development
The Bahamas has worked hard to provide more capacity in areas such as private wealth management, along with accountancy, legal and other services, moving beyond just registration of companies and other entities, Rolle said. The Bahamas has also worked on developing education and training for financial services – this continues to progress, he continued.

Several issues around the reputation of The Bahamas have been tackled, Rolle said, and the benefits of this are starting to come through. “There can be a bit of a lag in terms of the payoffs,” he said. 

“We are focused a lot on transparency and that is going to change the clients’ mindset,” he said. 

The Bahamas is advancing in areas such as digital assets and central bank digital currencies (CBDCs), and modernising financial services more broadly. As of the time of writing, legislators in the jurisdiction are debating the Digital Assets and Registered Exchanges (DARE) Bill, which contains a number of changes to regulations affecting digital assets.”

“We have a foundation for digital assets now – a legal framework. “The legal and regulatory environment needed to be properly defined from the investment point of view, and financial integrity point of view…and we had to have certainty and be robust from a prudential aspect. We have made progress in all these areas.”

Asked by WealthBriefing whether CBDCs raised any concerns about individual privacy, Rolle countered by discussing the theme of “data sovereignty,” and of the idea of putting citizens in charge of their data. It is important to draw a distinction between confidentiality in financial services and data, and anonymity, Rolle said.

Central banks and regulators worldwide face challenges over cybersecurity, and threats to private assets’ security. “We have a lot more to do in that space,” Rolle said. 

Macroeconomic background
“The issue is how we grow the financial sector. The outlook [in The Bahamas] is stable and we want to see a shift towards more of a growth component. For us, the most significant downside risk is how weather is affected by climate change,” he said.

The Bahamas has been able to “breathe a sigh of relief” about recent [US] inflation data, although interest rates continue to be higher. The geopolitical uncertainties that exist are a reminder that The Bahamas must remain nimble, he added.

(To see other articles about the jurisdiction, click here and here.)