The central bank of Bahamas is set to launch its own digital currency to maintain connectivity in far-flunged island and beaches. In the process it is set to beat some of the world’s superpowers in launching a sovereign digital currency.
According to a report in Bloomberg, After piloting the so-called Sand Dollar on the islands of Exuma and Abaco late last year, the central bank will roll out the e-currency nationwide in October. Officials say it will make digital payments easier, especially on the far-flung islands that play a critical role in the tourism-dependent economy.
The monetary authority has just $48,000 worth of Sand Dollars on its balance sheet, valued at 1-to-1 with the regular Bahamian dollar, which is pegged to the greenback. But even at that diminutive scale, the project puts the country at the forefront of a global race to create state-backed digital currencies, a goal shared by behemoths like China as well as Caribbean neighbors including Jamaica and Barbados, the report added.
“A lot of residents in those more remote islands don’t have access to digital payment infrastructure or banking infrastructure,” said Chaozhen Chen, the assistant manager of eSolutions at the Central Bank of The Bahamas. “We really had to customize the effort and the solution to what we need as a sovereign nation.”
To be clear, central bank digital currencies are far removed from their better-known crypto counterparts, such as Bitcoin and Ethereum. Those tokens are valued for the relative anonymity they give holders and their lack of direct ties to conventional currencies. Sand Dollars, on the other hand, are simply an electronic offshoot of the Bahamas dollar.