The Central Bank of The Bahamas, which introduced the world’s first digital fiat currency in 2020, is considering requiring banks to support its central bank digital currency (CBDC), the “Sand Dollar.”
According to Reuters, the Bahamas has established a challenging two-year timeline for commercial banks to integrate CBDC into their systems thoroughly. The central bank’s objective is to encourage institutions located in the Bahamas to adopt the Sand Dollar.
Additionally, to facilitate the CBDC, commercial institutions in the islands must update their IT systems. The central bank regards this as an essential measure to increase the adoption of the Sand Dollar and mobile payments.
According to John Rolle, the Governor of the Central Bank, institutions are currently being compelled to adhere to the mandatory regulations. “We have initiated the process of communicating this to our institutions,” he stated to the publication.
“We foresee a process where all of the commercial banks will eventually be in that space and they will be required to provide their clients with access to the central bank digital currency.”
Some industry participants have expressed dissatisfaction that these digital fiats still need to provide discernible advantages over current payment methods.
Rolle anticipates that the mandate for commercial banks to incorporate Sand Dollar payments would facilitate the acceptance of the currency by small businesses and restaurants that operate locally.
Bahamas’ Sand Dollar Sees Less Than 1% Circulation
Shaqueno Porter of the Central Bank of Bahamas updated the Sand Dollar’s progress in March. He observed that the CBDC has had a circulation of $2.1 million since its introduction in late 2020. This is less than 1% of the total currency in circulation.
Intriguingly, the number of CBDC wallets was 120,000, even though the population was just over 400,000. Nevertheless, Porter posits that numerous proprietary wallets caused customers to be perplexed, necessitating the provision of education to ensure that Sand Dollar functions identically in all of these wallets.
Additionally, the CBDC was made accessible to visitors visiting the island nation of the Bahamas. The initial seven months of the previous year saw nearly six million national visitors. The country also waived the KYC procedure for tourists who conducted smaller transactions in Sand Dollar.
