The Bahamas is taking steps to enhance the adoption of its central bank digital currency (CBDC), the “Sand Dollar,” by providing access through commercial banks. Central Bank of The Bahamas Governor, John Rolle, has announced plans to establish regulations within two years. The intention is for all commercial banks to eventually offer their clients access to the CBDC, requiring them to modify their IT systems accordingly.
The Central Bank of the Bahamas sees the expansion of the CBDC as crucial for increasing adoption rates of both the CBDC and mobile payments. Despite the low current uptake of the Sand Dollar, the bank is shifting from incentives to enforcement to drive adoption. Statistics show that the CBDC accounts for less than 1% of the country’s currency in circulation, with decreasing wallet top-ups indicating a need for increased usage.
Challenges and Opportunities
Governor Rolle highlights the challenges faced with the Sand Dollar, citing wide usage but low average transaction value. While there are 120,000 mobile wallets in existence, they represent less than 1% of retail payments. However, recent data from the central bank suggests some positive growth, with increased P2B and B2B transactions involving the Sand Dollar.
The Bahamas’ mandatory adoption policies could serve as a model for other countries looking to introduce their digital currencies. The European Central Bank, for example, is considering a similar approach with the potential digital euro. By requiring retail and banks to accept and offer the digital currency, the Bahamas and other countries aim to pave the way for a more widespread use of CBDCs globally.
The Bahamas’ efforts to promote the adoption of the Sand Dollar through commercial banks signify a growing trend towards digital currencies. Despite initial challenges, the central bank’s commitment to regulations and enforcement measures could set a precedent for other nations to follow as they explore the possibilities of CBDCs.
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