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Sand Dollar – The Challenge of the Digital Future of the Bahamas

Bahamas' Sand Dollar faces low user adoption despite its potential for financial inclusion and efficiency. With only $2.1 million in circulation after three years, efforts are focused on education and ease of access. The future of the Central Bank Digital Currency relies on increasing awareness and providing incentives for residents to use it.

The Bahamas and the Central Bank Digital Currency Sand Dollar

In October 2020, The Bahamas became a pioneer by introducing their own Central Bank Digital Currency (CBDC) called the Sand Dollar. Despite aiming for financial inclusion and increased transactional efficiency, the Sand Dollar is struggling to attract users.

Minimal User Interest

Since its launch, the CBDC has only attracted a small percentage of the total cash in circulation in The Bahamas. Three years after its introduction, the Sand Dollar amounts to just $2.1 million in circulation, representing less than 0.5% of the total cash supply on the islands.

Purpose of Introducing the Sand Dollar

The introduction of the digital currency aimed not only to provide financial inclusion and reduce service delivery costs, but also to secure the financial system against disruptions in internet and electricity access – particularly crucial given the frequent hurricanes and tornadoes in The Bahamas.

Education and Awareness

The Central Bank of The Bahamas emphasizes the role of education in relation to the Sand Dollar and is working to increase awareness about the digital currency. Around 120,000 residents out of 400,000 have opened a CBDC wallet, indicating a positive response to the new technology proposition.

Access to the Sand Dollar

To enhance access to the CBDC, the Central Bank of The Bahamas is implementing innovative solutions such as automated kiosks and direct top-ups through retailers or bank accounts.

The Future of the Sand Dollar

Despite initial enthusiasm, the Sand Dollar currently faces the challenge of increasing its popularity. The central bank believes that documenting transaction histories through the CBDC will enable residents to access credit, which could serve as an additional incentive to use the digital currency.

For more detailed information on central bank digital currencies and the decision-making process involved in their creation and implementation, it is recommended to consult nChain’s CBDC playbook.

Reklama:

Zonda - Największa Polska giełda cyfrowych walut