The digital currency of the central bank (CBDC) is now available to the citizens of the Bahamas. Thus, the island nation became the first in the world to introduce a state-issued digital currency.
The exchange rate of the virtual currency, called Sand Dollar, is pegged to the Bahamian dollar, which is itself pegged to the US dollar. The currency is usable through smartphones that are possessed by 90% of the archipelago inhabitants. In order to do this, users must install an electronic wallet designated by the central bank.
So far, financial institutions that will work with the CBDC include one commercial bank, three payment service providers, and four money transfer systems.
Furthermore, the state-issued digital currency is accepted in any shopping center on the Bahama islands. As stated on the project`s webpage, transaction fees are “negligible”.
The company NZIA is the main partner for the technological solutions of the central bank. The anonymity of CBDC users is not guaranteed, however, the new digital currency has strict rules of privacy and data protection.
The financial regulator plans to satisfy the demand as it grows in the future while meanwhile withdrawing cash from circulation in order to keep the market balance.
The government of the Bahamas announced its plans to launch a CBDC in June 2018. A pilot project was initiated in December 2019.
