Bahamas central bank adds new digital currency to balance sheet

Bahamas has taken its pursuit of a national digital currency to the next level, this time including it on its official central bank balance sheet. According to the Central Bank of Bahamas’ annual report for 2019, there was $48,000 worth of its central bank digital currency, the Sand Dollar, in circulation.

In its report, the regulator revealed that the pilot for the new digital currency was launched in Exuma, one of the districts in the Bahamas in December 2019. It later extended to Abaco in February 2020.

“This initiative is expected to provide the country with a modernized, interoperable payments infrastructure, accessible to all residents,” the bank wrote in its report. The Sand Dollar would also allow micro, small and medium-sized enterprises to digitize their payment systems, while also enabling “universal access to banking services; help to reduce unrecorded economic activities; and help suppress money laundering and other illicit activities more easily perpetrated with cash.”

The regulator revealed on its balance sheet that it had issued $48,000 worth of Sand Dollar to retail outlets in its pilot.

As CoinGeek reported last month, the Caribbean nation is looking to build a financial system that can withstand the frequent natural disasters it experiences, such as the catastrophic Hurricane Dorian in September last year. The category 5 hurricane claimed 3,000 lives, with over $3.4 billion in losses. In its post-Hurricane Dorian rebuild, the Bahamian government is looking at the Sand Dollar to make its financial system more resilient.

Earlier this year, the central bank revealed that it had seen overwhelming demand for the Sand Dollar from the public. In its pilot project in Exuma district, the bank enrolled 1,200 participants against a target of 500.

Following the successful pilots, the regulator expects to avail the Sand Dollar nationwide in October, according to local reports. The report cited the central bank governor, John Rollie, who stated, “We are anticipating that access on a national basis could begin during the month for October. We could do it today but it is not prudent for us to do it until we have completed the various security assessments and have at least out some markers in terms of what could be the minimum amount of regulatory structure around operations.”

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.