The Central Bank of the Bahamas (CBOB) is working on the development of a digital version of the Bahamian dollar.
Per the official announcement, the central bank will first launch the digital currency as a pilot in the Exuma district on December 27. The program will be extended to Abaco in the first half of next year.
Dubbed Project Sand Dollar, the regulator believes that the introduction of the digital currency will make access to the financial system more efficient and non-discriminatory.
“[The advantages of the digital currencies] include a potential suppression of economic costs associated with cash usage, and benefits to the Government from improved expenditure and tax administration systems,” the announcement stated.
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The central bank is also confident that the digital form of the fiat will also help in tackling money laundering, terrorist financing, and other illicit abuses of the financial system.
It also emphasized the role of both banks and non-banking payments services in the adoption of the new currency form.
“It is expected that the Government, as participant and user, would be a strong promoter of digital payments adoption, alongside non-bank payment services providers as the initial lead intermediaries in this space.”
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The CBOB is one of the many central banks in the world to explore the idea of introducing central bank-backed digital currency. As the Chinese central bank is set to bring its digital currency, its Russian counterpart also started to study the prospect of releasing its own cryptocoin. However, officials from the South Korean central bank made it clear that it has no plans to launch a CBDC.
“As the pilot progresses in Exuma, the Central Bank will simultaneously promote the development of new regulations for the digital currency, and strengthen consumer protection, especially around data protection standards,” CBOB stated.