The Bahamas pushes for CBDC adoption of ‘Sand Dollar’
The Bahamas, a pioneer in launching a central bank digital currency (CBDC), is now crafting regulations to boost the adoption… Continue reading The Bahamas pushes for CBDC adoption of ‘Sand Dollar’
The post The Bahamas pushes for CBDC adoption of ‘Sand Dollar’ appeared first on ReadWrite.
The Bahamas, a pioneer in launching a central bank digital currency (CBDC), is now crafting regulations to boost the adoption of its “Sand Dollar.”
According to a Reuters report published on Monday, the Caribbean nation aims to mandate commercial banks to offer access to this digital currency. John Rolle, governor of the Bahamas’ central bank, revealed plans to expand the Sand Dollar’s reach. He said:
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. […] We’ve begun to signal that to our institutions.
Launched in 2020, the CBDC has seen limited uptake. To address this, the government is developing rules that would require commercial banks to distribute the digital currency.
Since its October 2020 debut, the Sand Dollar has shown growth. Central bank data indicates that by the end of 2023, the currency’s circulation volume increased by 60.8% to $1.7 million from the year’s start. Personal wallets for the Sand Dollar grew by 20% over the year, reaching 118,955 by December’s end.
The news follows a mid-April report that the Reserve Bank of New Zealand (RBNZ) has announced that it is exploring the introduction of a central bank digital currency (CBDC), often referred to as “digital cash.”
The history of the Sand Dollar
The SandDollar, launched by the Central Bank of The Bahamas in October 2020, is a central bank digital currency (CBDC) designed to complement the Bahamian dollar. Its development began in the late 1990s as part of broader efforts to modernize the country’s payment systems.
In December 2019, a pilot program was initiated on the island of Exuma, chosen for its representation of The Bahamas’ archipelagic features. Following Hurricane Dorian in 2019, the pilot was extended to Abaco in February 2020 to aid in restoring financial services.
The SandDollar officially launched nationwide in October 2020, making The Bahamas the first country to roll out a retail CBDC according to Intereconomics. The currency operates on a tiered wallet system with different levels of access and transaction limits based on user verification requirements.
Initial adoption of the SandDollar was relatively slow, with monthly transactions averaging around 15,000 SandDollars. Usage increased in 2021 as COVID-19 restrictions eased and promotional efforts resumed. By the end of 2022, monthly transactions had grown to an average of 85,000 SandDollars.
In December 2022, the total SandDollars in circulation surpassed one million. However, as of early 2023, SandDollars still represented less than 1% of the total Bahamian dollars in circulation.
The Central Bank has continued to develop the SandDollar system, integrating it with the Automated Clearing House in 2022 to allow for transfers between e-wallets and bank accounts. As of 2023, the bank is working on implementing new features and improvements to enhance user experience and functionality.
The post The Bahamas pushes for CBDC adoption of ‘Sand Dollar’ appeared first on ReadWrite.