Recently, the Central Bank of the Bahamas launched its own blockchain-based CBDC, making it one of the world’s first countries to do it.
Named “Sand Dollars,” the tokens have cryptographic representations of the Bahamian dollar, imprinted and then regulated by the nation’s central bank, which integrates with the Caribbean island nation’s payments networks.
Today results in the “gradual release” of the Sand Dollar, even though a representative from the nation’s central bank stated that the 385,000 citizens can now set up Project Sand accounts and process transactions.
The central bank had authorized six financial institutions for Project Sand: Cash N Go, Kanoo, Mobile Assist, Money Maxx, Omni Financial, and SunCash. Only one didn’t go live recently; the representative stated that the central bank would continue to onboard and the whitelist financial institutions; however, “the institutions are really driving this from now on.”
The Bahamian central bank has designed the CBDC to complement cash and further improve its existing payment system. Project Sand claims that the country’s payment system will charge nominal transaction fees to the users, and the network is secured with high-level encryption protocols and “enhanced KYC/AML standards.”
Unlike Bitcoin, the Sand Dollar is controlled and imprinted in the central bank, and it can only be used for domestic payments. However, the Sand Dollar is based on a blockchain.
The Bahamas is one of the first countries to introduce a government-maintained digital currency. Based on a January report by the Bank for International Settlements, over 80% of the world’s central banks explore CBDCs. Few, on the other hand, have advanced as far as the Bahamians.