Reports from the Bahamas reveal that the country’s central bank is set to unveil a nationwide crypto across its entire archipelago in October
The Bahamas has announced it is working on plans to establish and institute a sovereign virtual currency, or CBDC, next month. If successful, it will have beaten some of the world’s superpowers to achieve this feat, including China.
Chaozhen Chen (the Ass. manager of eSolutions at the bank) explained that the objective behind the move was to achieve more financial inclusion among the remote islands. The e-currency valued at 1-to-1 with the Bahamian dollar will help connect the far-flung Islands
“A lot of residents in those more remote islands don’t have access to digital payment infrastructure or banking infrastructure. We really had to customize the effort and the solution to what we need as a sovereign nation,” said Chen.
Chen, in an interview with Bloomberg, further explained that the central bank digital currency (CBDC) wouldn’t be an exception to the current regulations. The CBDC will be treated the same way as it will be subject to the same policies that apply to the Bahama dollar. Chen also pointed out that there will be know-your-customer and anti-money laundering protections in place.
The new e-currency will be generated as demand increases. Concerning its institution, the CBDC will be exclusively circulated alongside the retirement of Bahamian dollars to alleviate any effects on monetary supply.
It has been a long journey that began when the Central Bank of the Bahamas revealed its intentions to pilot a CBDC back in June 2018.
The Central bank highlighted that several smaller islands had seen “commercial banks downsize and pull out of their communities, leaving them without banking services” at the time.
The project pilot was set in motion last year, with the CBDC being tried on two islands — Exuma and Abaco. The Sand Dollar is set to a specific exchange rate with the Bahamian dollar, which in turn is fixed to a specific rate with the US dollar. The project was considered a success with 48,000 Sand Dollars released in the pilot.
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