The Bahamas’ Central Bank, known for pioneering the world’s first digital fiat currency in 2020, is now moving towards requiring banks to integrate its central bank digital currency (CBDC) known as the “Sand Dollar”. According to Reuters, the Bahamas has set an ambitious two-year deadline for all commercial banks to fully implement the CBDC into their operations. This initiative aims to promote widespread adoption of the Sand Dollar among banks operating in the Bahamas.
In addition to mandating CBDC support, banks across the islands must update their IT infrastructure to accommodate the Sand Dollar, a move seen as crucial by the central bank to stimulate the adoption of digital payments, particularly mobile transactions.
John Rolle, Governor of the Central Bank, emphasized that institutions are now obligated to comply with these regulatory requirements. “We have already communicated this expectation to our institutions,” Rolle stated in an interview.
Despite some industry skepticism about the advantages of digital currencies over traditional payment methods, Rolle anticipates that by compelling commercial banks to integrate Sand Dollar payments, smaller businesses such as local restaurants will increasingly accept it as a legitimate form of payment.
As of March, the circulation of the Sand Dollar amounted to $2.1 million since its launch, representing less than 1% of the total cash in circulation. Shaqueno Porter of the Central Bank of the Bahamas highlighted that there are currently 120,000 CBDC wallets in use, despite confusion among users due to the presence of multiple proprietary wallets. Porter stressed the need for public education to clarify that the Sand Dollar is universally accepted across all platforms.
Moreover, the Bahamas has extended the use of CBDC to tourists visiting the country, who are exempted from the KYC process for smaller transactions conducted in Sand Dollar. Last year alone, nearly six million tourists visited the Bahamas within the first seven months, underscoring the potential for CBDC to enhance the efficiency of transactions in the tourism sector.
For more updates, follow us on Google News.
