Bahamian Central Bank Launches ‘Sand Dollar’ Digital Currency – World First?
The Central Bank of the Bahamas is the latest financial institution in the country to launch a digital currency that is state-backed. All 393,000 Bahamian citizens now have access to the so-called “Sand Dollar”, which is pegged at the Bahamian dollars (which is also pegged to USD). Although many countries have made efforts to issue central bank digital currencies (CBDCs), the Bahamas is the first country that has successfully launched a CBDC.
An October 20th, Project Sand Dollar posted the announcement about the new digital currency. It can be sent and received using a mobile application and can be used by any merchant that has an approved e-Wallet from Central Bank.
The Sand Dollar was created to encourage financial inclusion in the Caribbean archipelago, which includes more than 700 islands of which over 30 are inhabited.
According to the official website, Sand Dollar transaction fees will not be charged. The project was launched in partnership to NZIA, a decentralized wireless payment system, who acted as technology provider for the rollout.
CoinTelegraph reports that the Bahamian central banks have been working for years to launch its digital currency (CBDC), according to CoinTelegraph.
In 2019, the bank started a pilot program, issuing 48,000 Sand Sollars to Exuma and Abaco islands. These islands have a combined population less than 25,000.
Central Bank Digital Currencies are on the Rise in the Caribbean & Beyond
The “Sand Dollar” joins an increasing number of digital currencies that have been created by financial institutions in the Caribbean.
The DXCDCaribe pilot, an ECCB digital currency project launched last year. DXCD (representing digital currency) is the name of the project. It combines ‘D” (representing digital currency) and ‘XCD’ – which is the international currency code for Eastern Caribbean dollars. A pilot used a digital version the EC dollars, dubbed DCash’.
The ECCB stated at the launch of the project that DCash would be issued by ECCB and distributed by licensed banks and non-bank financial institutions within the Eastern Caribbean Currency Union. It will be used to conduct financial transactions between consumers, merchants, and people-to-people transactions (P2P), all via smart devices.
Many CBDC projects are being created in other countries. The most prominent is China’s digital currency, currently under test.