Mastercard credit and debit cards. Photographer: Andrew Harrer/Bloomberg

Mastercard, Island Pay launch first digital currency prepaid card

Mastercard credit and debit cards. Photographer: Andrew Harrer/Bloomberg

Mastercard and Island Pay have partnered to give users an additional option to use The Bahamian Sand Dollar — the world’s first central bank digital currency (CBDC).

The Central Bank of the Bahamas (Photo: LinkedIn)

Held together by the Central Bank of The Bahamas, the prepaid card will enable people to instantly convert the digital currency to traditional Bahamian dollars and pay for goods and services anywhere Mastercard is accepted within the islands and around the world.

Originally piloted in 2019, the Sand Dollar became the first fully deployed digital version of a country’s fiat currency in October 2020. At that time, the Sand Dollar was exclusively accessed by registered users through a digital app provided by local payment service provider Island Pay at select merchants.

There are 700 small islands in The Bahamas, covering more than 5,000 square miles of water.

It has become costly to move cash, which makes a CBDC a preferred digital payment in the region.

“We welcome this approach to combining digital currency use with access to foreign currency and other payment outlets. The Central Bank of The Bahamas will continue to encourage fintech developments that tie into the Sand Dollar infrastructure, while allowing us to satisfy best global practices for regulation of the space,” said John Rolle, governor of the Central Bank of The Bahamas.

Governor of the Central Bank of The Bahamas (File photo)

Furthermore, executive vice-president at Mastercard Raj Dhamodharan praised the project’s results and indicated that this initiative represented just the tip of the iceberg, as 2021 has already seen Mastercard and other industry leaders like Visa partner with innovative fintechs to chart new paths in digital payments, including Paymentology, CleverCards, and Joompay.