The small island nation of the Bahamas is set to edge out global powers such as China and Sweden and become the first country to roll out a nationwide central bank digital currency. Following several months of pilot testing, the Bahamian Sand Dollar is set to be rolled out in October.
The Bahamas, a country of 400,000 people, has been pilot testing its digital currency since December 2019. As CoinGeek reported, the Sand Dollar eyed to make the country’s financial system more resilient in the face of natural disasters.
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.”
The Sand Dollar will be transacted via mobile phones, availing it to over 90% of Bahamians. The users will be able to make payments even when offline.
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.
In launching the Sand Dollar, the Bahamas will become the global leader in a field that has attracted interest from some of the largest economies. China has been long considered the leader in this field. Despite being aggressive in its development, and having been at it for over five years, the Asian giant is still yet to launch its CBDC.
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.
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