Forget about China, Sweden, or even project Libra. The tiny Caribbean island country of the Bahamas is racing ahead with its central bank digital currency (CBDC), dubbed the ‘Sand Dollar’. Pilot projects have already reached two of its largest island chains.
Bahamian Digital Currency Rolls Out to Second Major Island Chain
The Bahamian central bank is way ahead of most countries when it comes to launching their CBDCs. In fact, Bitcoinist recently reported that it was on track to have it rolled out to all islands by the second half of 2020.
According to a report today, the ‘Sand Dollar’ is now available on the island of Abaco. This will give its inhabitants “easier access to financial services,” according to Deputy Prime Minister and Minister of Finance K Peter Turnquest.
The first pilot project of the digital Bahamian dollar was introduced by the country’s central bank in December. This began in the geographically dispersed islands of the Exumas of which only a few of the 365 islands are inhabited. The project has now been extended to its fourth largest island collection, the Abacos.
Sand Dollar Will Help Recover After Hurricane Dorian
Turnquest spoke at the launch of the digital dollar in Abaco saying:
A few months ago, the Abaco islands sustained catastrophic damage to their infrastructure, various economic sectors and the very fabric of their lives… Hurricane Dorian was one we will never forget, but it is our hope that through the Sand Dollar, the Abaco islands can find some normalcy again, especially as it relates to their financial sector.
He added the Bahamian government was in full support of this digital innovation and was:
committed to ensuring the success of the Sand Dollar on every island of the Bahamas.
He clarified that the Sand Dollar is the exact equivalent of its paper version, in that it is fully backed by the external reserves of the Central Bank. He also said that for those people who had sustained great property damage and even lost everything, this would give them easier access to financial services.
For example, they can now make payments through their mobile devices without incurring fees in direct peer-to-peer transfers.
Furthermore, the consumers can feel secure as the Sand Dollar offers multi-factor authentication where they can use facial recognition, biometrics or a password to access their Sand Dollar app on their mobile devices.
When it comes to the security and privacy of the transactions he reassured his citizens on two counts.
It is also important to note that the Sand Dollar is not anonymous but it is confidential. The Central Bank is working diligently to ensure the safety and security of every consumer in the digital sphere.
During the pilot projects, one of the key components to be worked upon will be the use of the Sand Dollar with offline functionality. This is something that would be absolutely vital in the case of natural disasters that the islands frequently face. Turnquest said:
The Sand Dollar will revolutionize the way business is conducted throughout our islands. Once again, the Government of the Bahamas is in full support of this initiative and we look forward to the continued roll-out in the rest of the Bahama Islands.
While world superpowers take steps towards launching their own digital currency, the Bahamas is way ahead. It may be able to teach some vital lessons about the effect of currency digitization–for better or for worse.
Do you think the Bahamas will be the first country to launch a fully operational CBDC? Add your thoughts below!
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