On Thursday, John Rolle, the Central Bank of the Bahamas’ governor disclosed that the community’s digital currency pilot project would officially launch on the island of Exuma on Friday. Residents are being encouraged to participate in the bank’s digital currency initiative dubbed “Project Sand Dollar.”
Before the launch, the CBOB once again clarified that “Sand Dollar” is not a cryptocurrency. Instead, the institution refers to it as a digital fiat currency that is the same in every aspect of the Bahamian dollar. Notably, one of the main goals of the Sand Dollar Project is to establish a seamless and cost-efficient digital payment infrastructure that would connect businesses and domestic residents. Furthermore, the bank also emphasized that the pilot project is a critical part of the CBOB’s plan to launch its own CBDC.
As explained by the bank, people living in Exuma can participate in the pilot project by using a mobile wallet designed by the Bahamian government. There are QR codes that are linked to the wallets which residents can use to pay retailers. Meanwhile, the banks would be responsible for transferring the payments in digital version.
As envisioned by the central bank, this system would significantly cut the costs associated with printing. Furthermore, aside from improving financial inclusion, it would incur lesser transaction fees compared to what the traditional payment system charge to the residents of the island chain.
As for the upcoming CBDC, the central bank claims that the new digital asset would protect consumers who hold plenty of cash against criminals. Business people can also save a considerable amount of money that is often allotted for insurance and security costs.
However, in a project outline released on Christmas Eve, the CBOC clarified that the Bahamian government is closely watching the Sand Dollar. For security purposes, the government had imposed restrictive limits.
As explained in the outline, the digital wallets which are accessible via smartphones can only hold a maximum amount of $1 million. Furthermore, companies are only allowed to use the wallet for one-eighth of their total annual business. As for individuals, the maximum amount they can store in their digital wallets is $500. However, the bank guarantees that higher limits would be allowed depending on the clients’ diligence.
Next to Exuma, the pilot project would be launched to other Family Islands, the governor confirmed.