Bahamas launches the world’s first central bank digital currency “Sand Dollar”

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The Central Bank of the Bahamas has announced that “Sand Dollar” as a state-backed virtual currency is now available nationwide.

According to the project Sand Dollar posted on Facebook on October 20, at approximately 10pm UTC time, a total of 393,000 residents in the Bahamas started using “Sand Dollar”. Therefore, the Bahamas became the first country in the world to officially launch CBDC.

At present, China is testing a digital renminbi pilot project by issuing 1.5 million U.S. dollars of digital renminbi, and the Cambodian digital currency “Bakong” is expected to be put into use in the next few months following the trial in July 2019.

Sand Dollar transfers are made via mobile phones. As of 2017, approximately 90% of Bahamas residents use mobile phones.

According to the Sand Dollar website, Bahamian residents can use digital currency at any merchant by using an electronic wallet approved by the central bank on a mobile device, and transaction fees are “negligible.” The Central Bank of the Bahamas has selected the transaction provider NZIA as its technical solution provider for the launch of digital currency.

The Central Bank of the Bahamas has been preparing for the launch of its CBDC for several years. In 2019, the Central Bank of the Bahamas launched a pilot project using 48,000 digital Sand Dollars on Exuma and Abaco, which have a total population of less than 25,000. Each Sand Dollar is linked to the Bahamian dollar, and the Bahamian dollar is linked to the U.S. dollar.

Sand Dollar aims to promote greater financial inclusion in the more than 700 island countries of the archipelago (of which about 30 are inhabited).

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According to a September report by Cointelegraph, Chaozhen Chen, deputy manager of eSolutions at the Central Bank of the Bahamas, said that Sand Dollar will help residents who have not received banking services and who do not have bank accounts access digital payment infrastructure or banking infrastructure.