The Bahamas has been using a new form of currency. Last fall, the Central Bank of the Bahamas officially launched its national digital currency, the “sand dollar.” The rollout has been smooth, according to observers.
The sand dollar, the first of its kind in the world to have been fully deployed, is a digital version of the Bahamian dollar.
Issued by the country’s monetary authority as a central bank digital currency (CBDC), the launch was announced via a tweet in October 2020.
The sand dollar is backed 1:1 to the Bahamian dollar (BSD); the BSD is pegged to the U.S. dollar.
Other countries are also looking into central bank digital currencies. More than 60 central banks are considering them. China is reportedly close to launching its digital yuan, and the U.S., Russia, and the European Union are looking into their respective CBDC launches, CoinDesk reported.
“CBDCs will contribute significantly to the modernization of the international monetary landscape, hand-in-hand with reconfiguration in both payment and financial infrastructure,” said Henri Arslanian, the global crypto leader at global professional services firm PricewaterhouseCoopers, in a Bloomberg report. “They will generate numerous opportunities for further digitization in both corporates and financial institutions, as their integration in payment and financial infrastructure progresses.”
Central bank digital currencies such as the sand dollar are a win-win, according to Arslanian. “The general public will be one of the biggest beneficiaries of CBDCs as it will give them access for the first time to a digital form of central bank money,” he said. “And that is a big milestone in the evolution of money.”
Here are three things to know about The Bahamas digital sand dollar.
The Bahamas CBDC rollout involved private-sector players including banks and credit unions to organize compliance checks for personal and enterprise wallets to support the sand dollar, CoinDesk reported.
The sand dollar digital wallets are secured with multi-factor authentication security and are mobile-based, servicing 90 percent of Bahamas’ population with smartphones, CoinDesk reported.
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The central bank said the sand dollar initiative targeted the country’s underserved communities. It will reduce financial service delivery costs and boost transactional efficiency.