The Bahamas is set to become the world’s first country to launch a sovereign digital currency next month.
After piloting the so-called Sand Dollar on the islands of Exuma and Abaco last December, the central bank will roll out the e-currency nationwide in October. Officials say it will make digital payments easier in the tourism-dependent economy.
Sand Dollar accounts are subject to the same rules as traditional bank accounts, with anti-money-laundering and know-your client safeguards in place. The monetary authority has just $48,000 worth of Sand Dollars on its balance sheet, valued at 1-to-1 with the regular Bahamian dollar, which is pegged to the US dollar.
New Sand Dollars will be “minted” as demand grows and will only be issued when physical Bahamian dollars are retired to keep from skewing monetary policy. The project puts the country at the forefront of a global race to create state-backed digital currencies, ahead of China as well as Jamaica and Barbados. Sand Dollars, are simply an electronic offshoot of the Bahamas dollar. Holders will be able to use their mobile phones to make person-to-person or business transactions – even when they’re offline. (B) (CG)
Extract from the CARICOM BUSINESS Newsletter Vol. 3 No. 38
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