The Bahamas is edging closer to launching its central bank digital currency, the country’s central bank has revealed. Known as the Sand Dollar, the digital currency is expected to make the nation’s financial system more resilient in the face of natural disasters.
In September 2019, Bahamas suffered its worst natural disaster ever when Hurricane Dorian struck. The category 5 hurricane devastated the island, taking the lives of over 3,000 people according to local reports. It also wreaked havoc on the local economy, with over $3.4 billion lost.
The Bahamian government started developing the Sand Dollar in response to the disaster as it sought to “full-proof” its financial system against such destruction in the future. Now, according to the central bank, the Sand Dollar is in its final stages and could be launched by the end of Q3 2020.
Sand Dollar allows Bahamians to make and receive payments through their mobile phones or a smart card. With the island prone to natural disasters, the CBDC ensures that it can quickly rebuild its payments system in such cases.
In a document outlining the lessons learned from Hurricane Dorian, the bank stated, “Sand Dollar’s mobile phone functionality will mean that the financial recovery aspects of a hurricane can progress more quickly and more safely than would otherwise be the case.”
The country, like the rest of the world, has also been grappling with the COVID-19 pandemic. The deadly virus has infected 111 and claimed the lives of 11 in the Bahamas. Sand Dollar is expected to curb the spread of the virus by enabling contactless payments through the use of mobile phones.
The CBDC will also allow the financial institutions to move away from paper documentation, the bank added. In the aftermath of Hurricane Dorian, many banks lost several documents to the floods. Those which didn’t were unable to access them as the roads were flooded. The Sand Dollar will allow the digitization of financial documents, allowing the banks to access them from any location, even during a disaster.
As CoinGeek reported, the country’s private sector has embraced the CBDC project. The local business and startup community has joined together to create an enabling environment for the realization of the CBDC’s goals.
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