The Central Bank of the Bahamas (CBOB) is planning to introduce a digital version of the Bahamian dollar in the Exuma district.
According to an official press release, the CBOB will launch its digital currency (CBDC) pilot on Dec. 27, which will extend in the first half of 2020 to Abaco, a group of islands and barrier cays in the northern Bahamas.
The digital currency is being developed under the initiative called Project Sand Dollar and will be the Bahamas’ first digital currency. The initiative aims to make access to financial services more efficient and non-discriminatory.
Bahamas’ digital currency can reduce the ill effects of cash
In a document outlining how the initiative will operate, the CBOB explained that the digital currency could “reduce the ill effects of cash usage.” According to the Central Bank the so-called sand dollar, would also “effectively strengthen national defenses against money laundering, terrorist financing and other illicit abuses of the financial system.” The CBOD added:
“Cash usage also imposes physical security risks on businesses and creates more exposure to fraudulent losses relative to electronic point of sales transactions. As it relates to physical safety, a widely adopted CBDC would also place users at less risk of violent crimes that target holders of cash, and potentially reduce security and insurance costs associated with keeping cash on business premises.”
Digital currency particularly useful after natural disasters
In October, the governor of the CBOB, John Rolle, said during a speech at the Counsellors Limited’s Exuma Business Outlook at Sandals Emerald Bay, that the Bahamas’ digital currency would have the ability to free the country from dependence on cash, which would be particularly useful after a natural disaster. He explained:
“It would permit wireless restoration of payments connectivity, avoiding the cash shipment and cash handling frustrations. It would permit electronic dispersing of aid and allow families to recapture personal dignity by restoring the flexibility to prioritize the elements of personal need that they prefer to satisfy post-disasters.”