- The Central Bank of Bahamas will be rolling out its cryptocurrency as early as next month.
- Lack of banking service in remote areas necessitated the introduction of the Bahamas CBDC.
- The Pilot phase of the “Sand Dollar” project was rolled out in 2015, and it was deemed to be successful.
The Central Bank of Bahamas has put plans in place to roll out its digital currency across the country. With this plan fully set, the Bahamas will be aiming to be the first country in the world to have a state-backed e-currency. The country’s central bank has also finalized plans to launch a central bank-issued cryptocurrency from as early as next month.
The digital currency will encourage more monetary participation
Chaozhen Chen, assistant supervisor of eSolutions at the bank, revealed that the government-backed cryptocurrency will be known as “Sand Dollars”. The aim of launching the cryptocurrency, according to Chen, is to improve the monetary participation especially in the remote areas of the island.
He said, “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.“
One unique feature about the Sand Dollar is the fact that anyone can make the transfers as long as they have a smartphone. That means, it will encourage more monetary additions since more than 90% of the population of the Bahamas own or have access to a smartphone, Chen pointed out.
Chen did not fail to mention that both the Bahamas Dollar and the central bank digital currency (CBDC) will be subjected to the same guidelines. He said know-your-customer policies and anti- money laundering reporting officer defenses will be applied to the accounts that will use the virtual currency.
As the needs of the Bahamas population for digital currency increases, the bank plans to develop new digital currencies to meet those needs. The CBDC will be rolled out along with the Bahamas dollars to minimize the potential influence on financial supply.
Lack of adequate banking service created a need
The plan to launch a CBDC by the Central Bank of the Bahamas was initially revealed in June 2018. This was necessary as several banks around the smaller islands trimmed down their operational network, with most of the communities affected.
Many of the banks pulled out from the communities as a result of their downsizing, leaving the communities with no proper banking services. This brought the need for an alternative method for residents in such communities to have financial services, which prompted the development of Bahama’s CBDC.
The “Sand Dollar” project was released in 2015, with each Sand Dollar having the same value as the Bahamas dollar. Although the pilot phase saw the release of only 48,000 Sand Dollars, it was considered successful.