Project Sand Dollar: The Bahamas launches world’s first CBDC
Project Sand Dollar is the initiative embarked upon by The Central Bank of The Bahamas (CBOB) to issue its own digital version of the Bahamian dollar, as well as implement the appropriate digital payments system infrastructure to sufficiently underpin the operation of a digital currency ecosystem.
The central bank digital currency, called Sand Dollar, is now available nationwide.
The Bahamas is the first country in the world to officially launch a central bank digital currency beyond a pilot program, ahead of China and several other countries. The Sand Dollar pilot program was launched in December 2019 on The Exumas before its national rollout in October 2020.
Lennox Paton advised the CBOB on the legal and regulatory framework in respect of the creation and operation of the state-backed digital currency.
The Sand Dollar shares the same monetary stability as the Bahamian fiat and may be referred to as “the digital Bahamian dollar”. The virtual dollar is issued by the CBOB to secure e-wallets held by an initial tranche of six licensed money-transfer and payment firms. Through them, people and businesses can then access, hold, transfer and spend the Sand Dollar through a smart phone app – approximately 90% of the Bahamian population has been using mobile phones since 2017.
The CBOB has advised that public access to The Bahamas’ digital currency is projected to increase during the first quarter of 2021, as financial institutions continue to integrate the Sand Dollar into their mobile wallet platforms. The CBOB also stated that it will reveal more details on the regulatory environment for the digital currency this month, including minimum interoperability and financial inclusion standards.
The project is intended to drive greater financial inclusion and provide wider access to financial services across the sparsely populated archipelago, consisting of 700 scattered islands.
“The aim of the Sand Dollar project is financial inclusion for all residents in The Bahamas by way of access to a central bank digital currency on a modernized technology platform.” (CBOB)
More information about the project is available on the Sand Dollar website: www.sanddollar.bs.