Bahamas to launch its digital currency next month

The Central Bank of The Bahamas is said to be launching its sovereign digital currency, Sand Dollar, next month.

Bloomberg reported the news on Tuesday, saying that Sand Dollar will be rolled out across the Bahamas islands in October. The central bank began piloting the digital currency last December.

Once live, Sand Dollar would allow individuals and businesses to make payments via mobile, even when they are offline. "A lot of residents in those more remote islands don't have access to digital payment infrastructure or banking infrastructure," Chaozhen Chen, the assistant manager of eSolutions at the Central Bank of The Bahamas, told Bloomberg. "We really had to customize the effort and the solution to what we need as a sovereign nation."

During its pilots in Exuma, a district of the Bahamas, the central bank had issued $48,000 worth of the Sand Dollar, valued 1:1 with the regular Bahamian dollar. Chen now told Bloomberg that new Sand Dollars would be "minted" as demand increases and will only be issued when physical Bahamian banknotes are halted. 

The Bahamas central bank began researching digital currencies in 2018 and is set to beat some of the world's largest economies, such as China, in launching a national e-currency. The Bahamas central bank's technology partner for Sand Dollar is a local payment solution firm called NZIA Limited.

The Sand Dollar project features prominently into The Block's recent comprehensive report on central bank digital currencies. Read the 92-page report here.