Capital Union Bank: Digital Assets at a Nassau Private Bank

Most Bahamian banks say nothing public about crypto. Capital Union Bank is the exception: it is one of just two banks on the Securities Commission’s digital asset register, and it built its custody on Swiss technology. It is also a private bank for professional and wealthy clients, which shapes everything about how you would use it.

What the SCB registration covers

Capital Union Bank Ltd. appears on the SCB register as a registered firm approved to carry on digital asset business under the DARE ActDARE Act The Digital Assets and Registered Exchanges Act 2024, the Bahamian law that requires crypto businesses operating in or from The Bahamas to register with the Securities Commission. Glossary 2024. Its approved activities are exchanging digital assets for fiat and for other digital assets, transfer services, custody, management of digital assets and stakingStaking Locking up certain coins to help secure a blockchain in exchange for a yield. DARE-registered staking providers must warn clients about the risks in writing. Glossary. Only five firms on the register are approved for staking, and Capital Union is the only bank among them. Bank J. Safra Sarasin (Bahamas), the other private bank on the register, is now listed only for receiving and transmitting orders.

The custody approval means the bank holds the private keys for clients, a custodialCustodial Someone else, usually an exchange, holds the keys for you. Easy, but you rely on that company staying solvent and honest. Glossary service. “Management” lets it manage digital assets on a client’s behalf. As with every staking provider, the DARE Act requires it to warn clients that staking rewards may create tax liabilities.

The Taurus custody set-up

In January 2023 Capital Union and Taurus, a Geneva-based infrastructure firm, announced that the bank uses Taurus-PROTECT to hold digital assets for its private, professional and institutional clients, and Taurus-EXPLORER for connectivity to more than 15 blockchain protocols. The custody service was described as already in production; tokenised assets were a planned next step. Chief executive Patrick Zbinden framed the bank’s role as acting as “trusted custodians” for digital assets.

Before that, in a June 2022 interview with Cointelegraph, a spokesperson said crypto trading and custody were a “fairly small portion” of the business, which remains focused on traditional wealth management. The bank said it has no “directional view” on crypto and offers trading to professional clients who want the asset class. It had partnered with Chainalysis for blockchain analytics in April 2022 and reported about US$1 billion under management at the end of 2020.

How a private bank differs from an exchange

On an exchange you open an app, verify your ID and buy within minutes from your phone. A private bank works through a relationship: you are onboarded by a banker, you answer detailed source-of-fundsSource of funds Proof of where your money came from, such as a payslip, sale agreement or bank statement. Often asked for larger deposits or cash-outs. Glossary questions, and trades are usually placed through the bank’s desk rather than a public order bookOrder book The live list of everyone’s buy and sell offers on an exchange, sorted by price. Glossary. You gain a regulated Bahamian counterparty, consolidated reporting alongside your other investments, and custody inside a bank’s control framework. You give up speed, small ticket sizes and the ability to withdraw to your own wallet at 2 a.m.

Bahamian banks also work within Central Bank guardrails. The CBOB’s 2018 discussion paper proposed that banks offer only custodial arrangements for client crypto, keep it off their balance sheets, not lend to buy it and not accept custodied crypto as collateral. Residents also face exchange controlExchange control Central Bank rules on residents moving Bahamian dollars into foreign currency or foreign assets. Crypto is treated as a foreign asset. Glossary: crypto counts as foreign property, and resident investment normally runs through the ICMInvestment Currency Market The Central Bank’s channel for residents buying foreign currency for overseas investment, with a 5% premium on purchases and 2.5% on sales. Glossary at a 5% premium, with approval.

Who Capital Union suits

It suits clients who already want, or would qualify for, private banking: high-net-worth residents, family companies, trusts and financial intermediaries who want digital assets reported next to bonds and equities. In its 2022 comments the bank said it can serve financial institutions, intermediaries and professional investors. It does not suit a first-time buyer with B$500. For a broader comparison of Nassau custodians, including Delchain at Deltec House and Galaxy, see our OTC guide.

Verdict

Capital Union Bank is the most bank-like crypto option on the SCB register: regulated custody, staking and management under one Bahamian private bank. If you are already a private-banking client, it is worth asking about. If you simply want to own some Bitcoin, an exchange is faster and cheaper to start; see our CEX.IO review, the exchange comparison, or the full SCB register.

Where to go next

Delchain (Deltec) Delchain operates from Deltec House in Lyford Cay with custody, trading and fiat settlement for … Read guide OTC desks Block trades, private banks and SCB-registered custodians in Nassau. Read guide Registered companies The official DARE register, decoded firm by firm. Read guide Banks & exchange control Wire fees, card surcharges and the 1.5% stamp duty, bank by bank. Read guide