The Bahamas is taking steps to make its central bank digital currency (CBDC) more accessible to the public. Central Bank Governor John Rolle announced plans to work with commercial banks to ensure that the “Sand Dollar” is readily available to clients. This move is part of an effort to boost adoption rates and encourage the use of CBDCs and mobile payments in the country.
The Central Bank of The Bahamas acknowledges that there will be challenges for commercial banks as they transition to offering the Sand Dollar to their clients. Rolle recognized that banks will need to make significant modifications to their existing IT systems in order to comply with the upcoming regulations. Despite these hurdles, the central bank believes that it is crucial for banks to embrace CBDCs in order to drive financial inclusion and innovation.
Despite the launch of the Sand Dollar in 2020, adoption rates have remained relatively low. According to Reuters, the CBDC currently accounts for less than 1% of the country’s currency in circulation. Additionally, wallet top-ups have seen a significant decline in recent months, indicating a lack of interest or usage among the public. Governor Rolle has indicated that it may be necessary to shift from offering incentives to enforcing the use of CBDCs in order to drive adoption.
Despite the challenges faced by the Sand Dollar, there have been some positive developments in recent months. The Central Bank of The Bahamas reported a modest increase in digital payments activities, including the use of the CBDC. Transactions between individuals and businesses using the Sand Dollar doubled in volume, indicating a growing acceptance of the digital currency. Additionally, the number of personal wallets in circulation has increased by 20% year-to-date, showing that there is potential for growth in the use of CBDCs in the future.
The Bahamas’ efforts to expand access to the Sand Dollar could set a precedent for other countries to follow suit. Reuters noted that the European Central Bank is considering similar measures to ensure that retail customers and banks are prepared to accept and offer any future digital euro. This shift towards mandatory adoption policies could signal a broader trend towards the use of CBDCs and digital currencies in the global financial system.
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