“Sand Dollar is available nationwide. Become Sand Dollar enabled today. Contact these Central Bank of The Bahamas supervised, authorised financial institutions for details.”
With these words, the Central Bank of The Bahamas, in a Facebook post on Wednesday, alerted nearly 400,000 residents spread across 700 coral islands of the launch of the country’s central bank digital currency.
“A lot of residents in those more remote islands don’t have access to digital payment infrastructure or banking infrastructure…”— Chaozhen Chen, assistant manager of eSolutions, Central Bank of The Bahamas
As a consequence of the introduction of Sand Dollar, the Commonwealth of The Bahamas has become the first country to issue a central bank-backed digital currency.
“The Central Bank of the Bahamas has announced the world’s first State-backed virtual currency—the Sand Dollar—with the CBDC now available to all citizens of the Bahamas,” a blockchain.news article stated.
“The world’s first CBDC became available to the residents of the Bahamas at around 10:00 pm UTC, according to an Oct.20 post on Facebook from Project Sand Dollar,” the website added.
Beginning in June 2018, the Sand Dollar Project aimed to facilitate the financial inclusion of residents spread across the sparsely populated archipelagic State, some of whom have been cut off from banking services.
“A lot of residents in those more remote islands don’t have access to digital payment infrastructure or banking infrastructure. We really had to customise the effort and the solution to what we need as a sovereign nation,” Chaozhen Chen, assistant manager of eSolutions at the Central Bank of The Bahamas explains.
The introduction of the digital currency would, at the same time, reduce the incidence of counterfeiting, money laundering, and other illicit cash-based activities, according to Cleopatra B Davis, head of the central bank’s Banking Department.
So, as part of a pilot run last year, the central bank issued a total of 48,000 Sand Dollars on the smaller islands of Exuma and Abaco, both of which have a combined population of less than 25,000 people. Pegged to the Bahamian dollar at 1:1, the Sand Dollar also carries a value of US$1.00.
The success of pilot project meant, therefore, that the nationwide issue of the Sand Dollar would enable all Bahamians to use their smartphones to pay for goods and/or services with any merchant who has a central bank-approved e-wallet on their mobile device. Since 2017, approximately 90 per cent of Bahamians use a mobile phone, the blockchain.newsreport said.
However, not all have embraced the launch of the CBDC. As one Facebook user, Rudy Knowles, commented, “This makes no sense! Why do I need to go to a cash transfer agency???”
In the meantime, other central banks in the Caribbean are getting ready to introduce their own State-issued currencies.
Just last month, the Eastern Caribbean Central Bank (ECCB) revealed that it was getting closer to the launch of its own CBDC, DCash, for use in that currency union. DCash can be used to send and receive funds, pay for goods and services, and transact business in a safer, faster, cheaper way, a press release from the ECCB outlined.
“For value-based [transactions], if you have an account with one of the participating financial institutions then you can get a registered based wallet through that financial institution. However, if your financial institution is not participating, or you do not have a bank or credit union account, then you get a value-based wallet,” chairperson of the ECCB Fintech Working Group, Sharmyn Powell.
The ECCB is currently conducting a test run with DCash in Antigua and Barbuda, Grenada, Saint Christopher (St Kitts) and Nevis, and Saint Lucia with its partner, Barbados-based digital currency developer Bitt.
Further back in July, the Bank of Jamaica invited CBDC providers to develop and test potential CBDC solutions within the framework of its Fintech Regulatory Sandbox.