The Bahamas Mandates Banks to Support its ‘Sand Dollar’ CBDC, Sets Two-Year Timeline
The Central Bank of The Bahamas, which launched world’s first digital fiat currency in 2020, is mulling to mandate banks to support its central bank digital currency (CBDC) – “Sand Dollar.”
The Bahamas has set an ambitious two-year timeline for commercial banks to fully adopt CBDC into their systems, Reuters reported. The central bank aims to foster Sand Dollar adoption across Bahamas-based banks.
Further, commercial banks in the islands must update their IT systems in order to support the CBDC. The central bank sees this as a vital move to boost Sand Dollar adoption and mobile payments.
Per John Rolle, the Governor of the Central Bank, institutions are now being forced to comply with the mandatory regulations. “We’ve begun to signal that to our institutions,” he told the publication.
“We foresee a process where all of the commercial banks will eventually be in that space and they will be required to provide their clients with access to the central bank digital currency.”
Some of the industry players complain that these digital fiats don’t yet offer any obvious advantages over existing payment methods.
Rolle foresees that compelling commercial banks to embed Sand Dollar payments, would pave way for small vendors like local restaurants and businesses to accept it as a mode of payment.
Bahamas’ Sand Dollar Sees Less Than 1% Circulation
In March, Shaqueno Porter of the Central Bank of Bahamas provided an update on the progress of the Sand Dollar. He noted that the CBDC currently amounts to $2.1 million in circulation after its launch in late 2020. This represents less than 1% of cash in circulation.
Interestingly, the number of CBDC wallet was at 120,000 out of a population of just over 400,000. However, according to Porter, the presence of multiple proprietary wallets confused customers and it became mandatory to educate them that Sand Dollar works the same in all of these wallets.
Further, The Bahamas also opened the CBDC to tourists visiting the island nation. Last year, the country received almost six million visitors in the first seven months alone. The nation also exempted tourists from KYC process, for smaller transactions in Sand Dollar.
