The central bank of the Bahamas plans to issue a national cryptocurrency in October.
The Bahamas want to be the first country in the world to introduce a state-supported virtual currency.
The region has announced that it intends to introduce a digital central bank currency in October
The deputy head of eSolutions at the central bank of the Bahamas Chaozhen Chen told Bloomberg that the digital currency is called „sand dollars“ and should promote the financial integration of the remote islands within the island nation.
„Many residents of these more remote islands do not have access to a digital payment or banking infrastructure. We had to tailor our work and the solution to what we actually need as a sovereign nation.“
Sand dollar transfers can be made using cell phones. In 2017, around 90 percent of the Bahamas population had a cell phone
Chen noted that the central bank digital currency (CBDC) will be regulated in the same way as the Bahamian dollar. Adhere to anti-money laundering and identity verification measures when setting up accounts for the virtual currency.
New digital dollars are released when demand grows. However, the CBDC is always issued in parallel to the Bahamian dollar. This means that the amount of digital currency that is added is taken from cash transactions. This is intended to mitigate possible effects on the supply of money in circulation.
The central bank of the Bahamas first announced in June 2018 that it would test a CBDC . It was said that on many smaller islands „commercial banks had shrunk and withdrew from the communities so that they were no longer offered banking services.“
Last year the government launched the “ Project Sand Dollar “ pilot project , which is testing the CBDC on the small islands of Exuma and Abaco, which only have 7,314 and 17,224 people respectively.
Each sand dollar is pegged to the Bahamian dollar, which in turn is pegged to the US dollar. While only 48,000 dollars were spent in the pilot, the project was considered a success.