The digital currency dubbed “Sand Dollar” will not be much different from the Bahamas local currency as they will both have the same regulations.
The Bahamas is on course to become the first country in the world to introduce a state-backed e-currency called the Sand Dollar by October 2020. The possibility of hitting the ground running with a Central Bank Digital Currency (CBDC) is being explored by a number of countries. However, none has come to a conclusion of integrating it into its financial system by October 2020 apart from the Bahamas.
The initiatives of introducing the Bahamian digital currency is an extension of the Bahamian Payment System Modernization Initiatives (BPSMI) launched in the 2000s. Chaozhen Chen, the assistant manager of e-solutions at the Central Bank of the Bahamas admitted to the fact that a lot of people living in the remote part of the country have no or limited access to banking infrastructures and digital currency infrastructures. For this reason, they will have to customize the efforts and solutions to what they need as a country.
The digital currency dubbed “Sand Dollar” will not be much different from the Bahamas currency as they will both have the same regulations. The Sand Dollar will be guided by the known anti-laundering and know-your-customer protections which are essential in the introduction of digital currency. According to John Rolle, the Central Bank Governor, the initiative can be started today, however, it is important to complete the various security assessments and the minimum amount of regulatory structures to prevent any inconveniences. In October, access on a national basis will commence.
More Details on Sand Dollar
The plan to introduce the Sand Dollar came to light after a number of banks limited their operational network in the smaller Island regions affecting a number of remote areas. Many banks pulled out their services from the smaller Island regions leaving most of them with limited or no proper infrastructures. This motivated the introduction of the Sand Dollar as they considered a perfect alternative to help them in such financial services.
In 2015, there was a project called the “Sand Dollar” project with both the Bahamas currency and the Sand Dollar having the same value. The pilot phase was successful with the introduction of 48,000 Sand Dollars.
The positive side of using the Sand Dollar is the fact that it will consider over 90% of the population. Anyone with a smartphone can initiate a transaction with the yet to release digital currency. Interestingly, 90% of Bahamians use a smartphone.
This will cause a massive addition of Bahamians to those financial networks. As much as the e-currency will come with a number of unquestionable benefits, there will also be a suppression of economic cost linked to cash usage. It is, therefore, important for the government to promote the adoption of digital payments and non-bank payment service providers.