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After successful piloting projects on the islands of Exuma and Abaco during 2019, the Central Bank in the Bahamas is set to launch a national digital currency across the entire country in October 2020 according to a local news site. The country will effectively become the first country on the planet to introduce a state-backed virtual currency nationwide.

The digital currency – currently termed the “Sand Dollar” – will play a major role in developing the economy. Many individuals on the remote islands do not have access to digital payment solutions. Banking infrastructure is also extremely limited on these remote islands.

Sand Dollar holders will be equipped to make person-to-person or business transactions through the use of mobile phones, even when the network is offline. The mobile phone-based digital currency will be able to withstand the effects of natural disasters – something these remote islands often have to contend with. In 2019, Hurricane Dorian had devastating effects on the country’s physical banking and payments systems, leaving many physical banks and ATMs offline for months.

According to Chaozhen Chen, the assistant manager of e-solutions at the Central Bank of The Bahamas:

“New Sand Dollars will be “minted” as demand grows and will only be issued when physical Bahamian dollars are retired to keep from skewing monetary policy”

The Bahamas is laying the groundwork for other countries looking to adopt a Central Bank Digital Currency. We look forward to more countries and regions following suit!

Feature image by Free-Photos from Pixabay 

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