The Bahamas is committed to becoming the first country in the world to introduce a nationwide state-supported virtual currency. The archipelago authorities announced that the cryptocurrency issued by the central bank will be launched in October.
Chaozhen Chen, assistant e-solutions manager at the Central Bank of the Bahamas, in an interview with the portal Bloomberg He said a digital currency called the “Sand Dollar” would improve financial integration between the islands within the archipelago.
“Many of the inhabitants of these remote islands do not have access to digital payment infrastructure or banking infrastructure. We really had to adapt our solutions to what we need as a sovereign nation. “
Sand Dollars transfers will be made via mobile phones. As early as 2017, about 90% of the Bahamas population enjoyed from smartphones.
The Sand Dollar will be subject to the same regulations as the traditional currency
Chen noted that the central bank’s digital currency, or CBDC, would be subject to the same regulations as the Bahamian dollar. When creating an account to support Sand Dollar, the user will have to go through the KYC and AML procedures.
New digital dollars will arise as demand increases. CBDC will be issued along with the withdrawal of Bahamian dollars from circulation, which is expected to mitigate the negative impact on the money supply.
The Central Bank of the Bahamas first announced that it wanted to pilot its own CBDC in June 2018. He then noticed that many smaller islands were experiencing “Restricting the activities of commercial banks and withdrawing from their communities, which deprives them of access to banking services.”
Last year, the government launched a pilot project called Project Sand Dollar, testing CBDC on the small islands of Exuma and Abaco – with only 7,314 and 17,224 inhabitants respectively.
Each Sand Dollar is pegged to the Bahamian dollar, which in turn is pegged to the US dollar. So far, only 48,000 Sand Dollars have been issued under the pilot project.
CBDC in the world
Earlier this month, the president of Banco Central announced that the central bank would launch its own digital currency (CBDC) by the end of 2023. The new report of the Bank for International Settlements (BIS) shows that in 2020 there was a revival in the field of digital currencies of the central bank (CBDC). CBDC’s interest even surpassed Bitcoin.