The central bank digital currency race (CBDC) moves on a bit further with the launch of the world’s first CBDC coming from the Central Bank of the Bahamas. As such, the Bahamas becomes one of the first nations in the world to officially deploy a CBDC outside of a pilot program.
As previously reported by The Daily Chain, the “Sand Dollars” is expected to drive greater financial inclusion and make digital payments easier among the remote islands that are heavily dependent on Tourism.
The launch date for the CBDC was announced last month, and it was set for a “gradual national release”, making it the first retail CBDC in the world.
An October 20 post on Facebook from Project Sand Dollar confirmed the launch, adding that the state-backed digital currency is now available to all 393,000 residents of The Bahamas from roughly 10:00 PM UTC.
“They can sign up today. And as soon as they have the Sand Dollar wallet in-hand, they can start transacting—both for the general public and merchants,” a representative from the nation’s central bank told Decrypt.
Hence, the Bahamas became the first nation to officially roll out a CBDC, overtaking China, which has been at the forefront of the rest since the start of the CBDC trend. The nation recently started testing its CBDC with a $1.5 million giveaway.
A simple and easy to use Electronic Money
Sand Dollars can be transferred using mobile phones and has been designed this way because approximately 90% of the Bahamian population have been using mobile phones as of 2017.
The website for Sand Dollars state that residents of the nation can use the CBDC at any merchant “with a Central Bank approved e-Wallet on their mobile device” with “negligible” transaction fees.
Transaction provider NZIA was recruited as the technology solutions provider for the launch of the digital currency.
More Sand Dollars will be minted in the future as demand rises, with the CBDC exclusively issued alongside the retirement of Bahamian dollars to mitigate potential impacts on monetary supply.
As of now, the Sand Dollar is pegged to the Bahamian dollar, which is in turn pegged to the U.S. dollar. The nation is still working on a regulatory framework for the sand dollar CBDC which is expected to “be crystalized in the public space” over the month of October.
The second phase of the launch is set for early-mid 2021 and will focus on building the essential infrastructure services in the government and private sectors, such as utility companies and service provides for the CBDC.