The Central Bank of the Bahamas is planning to introduce a digital version of the country’s national currency, the Bahamian dollar.
The virtual currency’s pilot phase is launching in Exuma, a district of the Bahamas, which consists of more than 365 different islands.
The central bank explains,
“This initiative has acquired the name Project Sand Dollar, with the sand dollar also being the name assigned to the proposed central bank digital currency (CBDC). This is a continuation of the Bahamian Payments System Modernization Initiative (PSMI), which began in the early 2000s.”
The Bahamian government aims to enable greater financial inclusion, while making the local payments system significantly more efficient and “non-discriminatory” in providing access to modern financial services.
To date, certain segments of the local population are excluded from the financial system because they live in remote areas that are not currently served by traditional institutions.
The Bahamian government joins several others around the world that are exploring research or launching pilots for new central bank digital currencies as a way to reduce friction, lower costs and remain competitive.
The Chinese government recently confirmed the completion of the framework for its national digital currency and is moving to the next phase of rolling out a digital form of the yuan.
Featured Image: Shutterstock/Ruth Peterkin