The Bahamas is taking steps to boost the adoption of its central bank digital currency (CBDC) known as the “Sand Dollar” by working with commercial banks. This move aims to increase the utilization of CBDC and mobile payments within the country.
Governor of the Central Bank of The Bahamas, John Rolle, mentioned that the country is looking to establish the necessary regulations over the next two years to facilitate this initiative. He highlighted the importance of having all commercial banks involved in providing access to the CBDC to their clients.
Despite the launch of the Sand Dollar in 2020, the adoption rates have been relatively low. Reports indicate that the CBDC only accounts for less than 1% of the country’s currency in circulation. This is a concerning figure considering the effort put into its introduction.
Commercial banks will need to make significant modifications to their existing IT systems to comply with the upcoming regulations. This poses a challenge for them as they transition into the digital currency space. The shift from incentives to enforcement signals a change in strategy to drive adoption.
Recent data released by the Central Bank of The Bahamas shows a mixed bag of results. While there has been modest seasonal growth in digital payment activities involving the Sand Dollar, there are still areas that need improvement. The growth in personal wallet counts and Sand Dollars in circulation is a positive sign but the overall adoption rates remain below expectations.
The mandatory adoption policies being implemented in The Bahamas could set a precedent for other countries looking to introduce their own CBDCs. The European Central Bank is also considering similar measures to encourage the acceptance and usage of any future digital euro they may introduce.
The Bahamas’ efforts to increase the adoption of the Sand Dollar through commercial banks are commendable. However, the challenges of low adoption rates and the need for banks to update their IT systems present hurdles that need to be addressed. By setting the groundwork for wider acceptance and utilization of CBDC, The Bahamas is paving the way for a digital currency future.