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The Bahamas has announced the launch of its central bank digital currency Sand Dollar which comes with several interesting features and the ability to work offline without electricity and mobile networks.
On Tuesday, October 20, the central bank of Bahamas announced its central bank digital currency (CBDC) Sand Dollar. As reported by the Nassau Guardian, the central bank is working to integrate it into the global financial system.
The Sand Dollar is a cryptographic representation of the Bahamian Dollar, controlled and regulated by the central bank. This makes The Bahamas the first country to roll out a CBDC. While launching the CBDC, the central bank manager of electronics solutions Bobby Chen revealed the name of the first six financial institutions to get access to the Sand Dollar. These institutions are Sun Cash, Mobile Assist, Cash and Go, Money Max, Kanoo, and the Omni Financial Group. Chen further added:
“At the moment, it is currently only used in a domestic setting, but eventually we are working on a solution that will make it interoperable with other global currencies.”
As per the 2017 data, nearly 90% of the Bahamian population uses mobile phones. Thus, a large majority of the citizens will transfer the Sand Dollar over the mobile handsets. The official website states that the resident can use Sand Dollar at any local merchant having a central-bank approved e-Wallet. Also, the transaction fee is very negligible. NZIA is the technology solutions provider to the central bank for its CBDC.
If the Sand Dollar becomes the global currency, The Bahamas will benefit from the first-mover advantage. However, it doesn’t guarantee that other countries will accept payments in Sand Dollar.
Some Interesting Features of the Bahamas Sand Dollar
Speaking at the launch event of the Sand Dollar, the head of banking of the central bank of Bahamas (CBOB) – Cleopatra Davis – revealed some unique features of Sand Dollar. She noted:
“Some of the central strategies around Sand Dollar is the API card-less onboarding. This became extremely important during the time of COVID-19 because we realized it’s not business as we know it prior to COVID-19. So, mobility and face-to-face may not be as easily accessible. So, through the API card-less onboarding you’re going to be able to have access to Sand Dollar without physically entering a business place to do so.”
Another good of the Sand Dollar is that it is usable offline. This is an important function of the CBDC since the Bahamas faces several natural disasters. Davis noted that they kept this thing in mind while designing the CBDC. Thus, citizens can use the Sand Dollar despite no electricity or mobile network.
“The CBOB is working to make the Sand Dollar interoperable with other wallets. That’s a key strategy that we’re working on as well as the RTGS/ACH integration, which would allow the movement of Sand Dollar to and from your bank account, which would then convert to fiat as it hit your bank account,” added Davis.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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