- The first-ever sovereign digital currency (CBDC) ready for the rollout in Oct by Bahamas that is pegging to the greenback.
- With the launch of Sand Dollar, the island of Grand Bahama is planning to become the digital paradise of the region.
The Central Bank Digital Currency – (CBDC) concept is catching fire day by day. A few nations have already started the process to pilot CBDC in their regions including the “unstoppable” China. Though, Bahamas leaps afore while launching its first nationwide digital currency Sand Dollar.
Reportedly, the Bahamas has become the first country to blastoff its sovereign digital currency within the Lucayan Archipelago which in a way beating other Caribbean neighbors like Jamaica and Barbados.
According to the Central Bank of the Bahamas, this is a forward-thinking initiative towards the “conventional payment system into modernization” and Sand Dollar is an initiative which is a “part of a strategy to provide an integrated, affordable electronic payment system” to all Bahamian businesses and residents.
Per the latest reports, the final roll-out of the CBDC is announced for Oct. After the launch, consumers can start transacting Sand Dollar without a bank account or mobile internet even in offline mode. Meaning, there is an option of a card-based wallet like a prepaid credit card.
“The sand dollar is an electronic offshoot of Bahamian dollar” unlike cryptocurrencies such as Bitcoin and Ethereum which are valued due to the anonymity they provide to the token holders. Sand Dollar in comparison is an e-currency pegged to the Bahamian Dollar and the Bahamian dollar is backed by U.S dollar/greenback. As per the plan, overall $48,000 worth Sand Dollar has minted and chances are to mint more is required.
Also, Sand Dollar would be governed and minted by the Central Bank so there won’t be a risk of money laundering. The so-called sovereign digital currency or CBDC is going to make digital payments much easier especially in a country that is mostly dependable on the tourism economy, according to the Bahamian executive, Bloomberg cited.
The Bahamian sovereign digital currency is far removed from the conventional PSP transactions. Meaning, “once a Sand Dollar transfer happens it’s final and irrevocable because it’s fiat currency”…“It is the essence of a settlement system.” The chief executive officer of Kanoo, one of the Bahamian PSPs (payment service providers) handling the Sand Dollar, mentioned to the publication.
Why Sand Dollar?
Towards the launch of Bahamas CBDC, there are several reasons which the Central Bank cited, out of which, the most prominent ones are the recent Hurricane Dorian that happened in the country from 24 August 2019 – 10 September 2019 and resulted in the damage of approx. $5.07 billion. Another being the effects of the Covid-19 pandemic which hugely affected the country’s economy. So, improving financial inclusion can aid to formalize the economy in a digitized way.
Last year in June, the monetary authority revealed NZIA Limited, IBM, and Singapore-based software development firm Zynesis Pte. Ltd- the technology providers in the design and implementation of Bahamas Digital Currency.
Earlier in 2018, during the Bahamas Blockchain and Cryptocurrency Conference, Bahama’s Deputy Prime Minister and Minister of Finance, K Peter Turnquest noted-
“The production of a modern fully digital payment service is the way forward for this era of governance. Digital Bahamian currency is especially important for the many family islands as they have seen many commercial banks downsize and pull out of their communities, leaving them without banking services. As an island nation, where transportation can be an inconvenience for many, especially the elderly, and costly, we must offer financial services digitally and securely.”
Turnquest also indicated the launch of blockchain certification for the students who complete studies at the National Training Agency.