The Central Bank of The Bahamas has launched a digital currency dubbed the “Sand Dollar” for the whole country.
The official Facebook page dedicated to the central bank digital currency (CBDC) project announced the launch on the night of Oct. 20. According to the post, the Sand Dollar is now available nationwide.
As Modern Consensus reported in mid-September, The Bahamas’ central bank had announced plans to launch its CBDC in early October. Chaozhen Chen, eSolutions assistant manager for the Central Bank of The Bahamas explained the reasoning behind the project when the announcement was published:
“A lot of residents in those more remote islands don’t have access to digital payment infrastructure or banking infrastructure… We really had to customize the effort and the solution to what we need as a sovereign nation.”
The Sand Dollar—which is pegged one-to-one to the U.S. Dollar—is expected to facilitate trade in the remote locations that play an important role in its tourism economy and make mobile payments easier. Users of the new digital currency will be able to make person-to-person or business transactions with their phones, even when they are offline.
The system is expected to simplify transaction management for the payment service providers as they will be able to rely on the transaction being “final and irrevocable because it’s fiat currency,” as a local payment service provider representative said. The end-users are not expected to see much difference compared to the mobile payment systems that they are already familiar with.
The tortoise outran the hare
Notably, the small island launched its digital currency before Asian superpower China launched its own. This is especially noteworthy considering that the People’s Bank of China was eager to be the world’s first nation to issue a CBDC in an attempt to expand its fiat currency past its borders and reduce its reliance on the dollar’s financial infrastructure.
China’s central bank believes that China could take advantage of the launch of a digital currency and that its development is a “new battlefield” of competition between nations. China is expected to launch its own CBDC soon, given that the system was reported to be ready since mid-September.