Key takeaways:
- With the goal of encouraging greater acceptance of its CBDC, the Bahamas is getting ready to present legislation mandating commercial banks to support the “Sand Dollar.”
- There are other nations outside the Bahamas where the penetration of CBDC is less than anticipated.
With the goal of encouraging greater acceptance of its central bank digital currency (CBDC), the Bahamas is getting ready to present legislation mandating commercial banks to support the “Sand Dollar.”
According to a Reuters report published on June 2, John Rolle, the governor of the Central Bank of the Bahamas, has stated that commercial banks are now being informed that they would be legally obligated to distribute the digital currency because the CBDC has not been adopted as well as intended.
Within the next two years, according to Rolle, the CBDC regulations ought to be prepared for implementation. Rolle also mentioned:
“We foresee a process where all of the commercial banks will eventually be in that space and they will be required to provide their clients with access to the central bank digital currency,”
The Sand Dollar has not been widely accepted in the nation; according to reports, the CBDC represents less than 1% of the Bahamas’ total currency, even though it was only established in 2020.
In contrast, the total amount of Sand Dollar wallet top-ups dropped from $49.8 million in 2022 to barely $12 million between January and August of last year.
The Bahamas Central Bank asserts that increasing the overall uptake of CBDCs and mobile payments is vital, even if forcing commercial banks to issue the Sand Dollar would require major technological overhauls for individual banks.
There are other nations outside the Bahamas where the penetration of CBDC is less than anticipated.
In May, a number of government employees who were part of China’s CBDC experimental program stated that they would rather exchange their digital “e-CNY” for physical currency due to its restricted functionality and worries about government monitoring.
Nigeria, which introduced CBDCs to Africa, is dealing with comparable problems. The nation has witnessed a decline in the percentage of its residents utilizing CBDC despite numerous efforts to increase acceptance. Less than 1.5% of Nigerians with bank accounts had active eNaira wallets as of mid-2023, and less than 1% of those wallets had weekly activity.
In October 2020, the Bahamas introduced the Sand Dollar digital currency to all 393,000 people, making it the first country in the world to do so.
