The island nation in the Caribbean will be the first country in the world to launch a digital currency issued by a central bank, the so-called CBDC (Central Bank Digital Currency). It will be called the “Sand Dollar” and can be used as a standard currency.
Although the Bahamas is not the first country to introduce this type of digital currency, it is the first to extend it beyond testing. In other words, it is the first CBDC currency to operate in normal circulation in the economy. China is currently testing its digital yuan, and Cambodia is considering a move similar to the Bahamas in the coming months.
The people of the Bahamas will be able to use the sand dollar for routine transactions, through a kind of digital wallet held at the Bahamas Central Bank. The digital currency has been tested by the Bahamas Central Bank in recent years when it could be used on a trial basis by people living on the islands of Exuma and Abaco. The sand dollar is pegged at a fixed exchange rate to the Bahamian dollar, the value of which in turn depends on the US dollar. The Bahamas Central Bank promises financial inclusion from the new digital currency for the Bahamas living on more than seven hundred islands and islets, as well as the development of the country’s payment infrastructure.