Mastercard, Island Pay Launch CBDC-Linked Card In The Bahamas

Mastercard is partnering with mobile wallet provider Island Pay and the Central Bank of The Bahamas to launch the first ever prepaid card that lets people pay using the nation’s central bank digital currency (CBDC), the Bahamas digital Sand Dollar.

Piloted in 2019, the Sand Dollar was made available to the general public in October of 2020, the first CBDC to do so, according to a press release issued by Mastercard on Feb. 17. It slowly made inroads into retail use cases.

In its original form, consumers could pay with Sand Dollars only through an app at specific merchants. With this prepaid card, consumers can pay with the Sand Dollar anywhere that Mastercard is accepted around the world. The card instantly converts the cardholders’ digital currency value to Bahamian dollars at the time of payment.

The Sand Dollar is equal in value to the Bahamian dollar and holds the same consumer protections. Employing it, notes the press release, can reduce the distribution cost of cash.

“In The Bahamas, there are 700 small islands and more than 5000 square miles of water. Cash money movement becomes costly, which makes a central bank digital currency (CBDC) a preferred digital payment in the region,” the press release says.

Eventually the Sand Dollar will also be available to tourists. John Rolle, governor of the Central Bank of The Bahamas, noted in the press release that the bank will “continue to encourage fintech developments that tie into the Sand Dollar infrastructure.”

“This partnership is an example of how the private and public sector can rethink what’s possible, while delivering the strongest levels of consumer protection and regulatory compliance,” said Raj Dhamodharan, executive vice president of Digital Asset & Blockchain Products & Partnerships at Mastercard, in the press release.

Last September, Mastercard launched a virtual testing platform for CBDCs.

“We’re creating a lot more possibilities for governments, shoppers and merchants, allowing them to transact in an entirely new form of payment,” Dhamodharan added.