The Central Bank of The Bahamas is to launch its Sand Dollar central bank digital currency (CBDC) in October, edging out global powers like China and Sweden to become the first country to roll out a nationwide digital currency. The new currency will be used in the entire archipelago with 400, 000 people, and it was piloted on the islands of Exuma and Abaco since 2019.
As CoinGeek reported, the Sand Dollar eyed to make the country’s financial system more resilient in the face of natural disasters.
Sand Dollar transfers are made by mobile phone, and would be availed to over 90% Bahamians. Users would be able to make payments even while offline. Each Sand Dollar is pegged to the Bahamian dollar, which is, in turn, pegged to the U.S. dollar. There are, currently only 48,000 Sand Dollars in circulation. As Bloomberg reported, new Sand Dollars will be “minted” as demand grows and will only be issued when physical Bahamian dollars are retired to keep from skewing monetary policy. Also, Sand Dollar accounts are subject to the same rules as traditional bank accounts, with anti-money-laundering and know-your-client safeguards in place.
The nationwide rollout is now only a few weeks away, officials at the Central Bank of Bahamas have revealed. Speaking to Bloomberg, assistant manager of e-solutions at the bank Chaozhen Chen stated that the CBDC will promote financial inclusion in the island nation.
He stated, “A lot of residents in those more remote islands don’t have access to digital payment infrastructure or banking infrastructure. We really had to customize the effort and the solution to what we need as a sovereign nation.”
Keith Davies, the CEO of local payment service provider Kanoo believes that the Sand Dollar will make the payment settlement process much more efficient. Kanoo has been one of the local firms piloting the digital currency.
“Once a Sand Dollar transfer happens, it’s final and irrevocable because it’s fiat currency. It is the essence of a settlement system,” he remarked.
As CoinGeek reported in August, the central bank included the Sand Dollar on its official balance sheet for the first time ever. The report revealed that there was $48,000 worth of the digital currency in circulation.
The central bank also sought to allay fears that the launch of the Sand Dollar would open up a digital currency Wild West. New Sand Dollars will only be minted to replace physical Bahamian dollars and will be subject to the AML and KYC rules that govern the banking and financial services providers.