Victor Ugochukwu · Dec 14, 2020 . 5min read
The Bahamas launches its CBDC the “Sand Dollar”
The Central Bank of the Bahamas has launched its digital currency, the Sand Dollar. The CBDC is now accessible to all Bahamas citizens.
By Komal Joshi · Oct 21, 2020 . 5min read
The Bahamas has launched the Sand Dollar, making it the first country in the world to officially release a central bank digital currency (CBDC) beyond the testing phase. The digital currency Sand Dollar intends to develop more financial inclusions among many Bahamas’ remote islands. The Bahamas is home to approximately 400,000 residents spread across 700 coral islands. The launch of Sand Dollar was a requirement for financial inclusion over the sparsely populated archipelago.
Sand Dollars as a cryptographic representation of Bahamian Dollar
Sand Dollars are cryptographic representations of the Bahamian Dollar. The nation’s central bank mints and regulates Sand Dollars. It integrates with the Caribbean island nation’s payments networks. According to the Sand Dollar website, residents of the Bahamas can trade the CBDC with any merchant on the archipelago leveraging a central bank approved e-Wallet on their mobile device with nominal transaction fees. Sand Dollar transfers are made utilizing smartphones, as approximately 90% of the Bahamas citizens use mobile phones since 2017.
According to the project’s whitepaper, the Sand Dollar is based on distributed ledger technology, in this case, a blockchain. The central bank elected transaction provider NZIA as its technology solutions provider for the digital currency rollout. The Central Bank of the Bahamas first declared the Bahamas digital dollar project in June 2018.
The Bahamas government launched the Project Sand Dollar pilot last year. The trials for digital currencies took place on Exuma and Abaco’s smaller islands, which have a linked population of fewer than 25,000 people. Additionally, the pilot was a success as the issuance of 48,000 Sand Dollars took place, with each pegged to the Bahamian Dollar. Moreover, the Bahamian Dollar is itself pegged to the United States dollar.
Conclusively, the Bahamas is one of the first countries to introduce a government-backed digital currency. Venezuela has the Petro, crypto, supposedly supported by oil barrels. China’s digital yuan is recently in trials in Shenzhen. Moreover, the government of the Marshall Islands is considering executing a cryptocurrency named the SOV.
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