The Central Bank of the Bahamas is planning to start a rollout of its new digital currency on Friday (Dec. 27) in Exuma.
Called Project Sand Dollar, the name of the currency will also be the sand dollar, according to a press release.
The move is long-awaited and comes after years of work through the Bahamian Payments System Modernization Initiative (PSMI), which began in the early 2000s.
The intent is to start a fully-fledged central bank digital currency (CBDC). After its rollout in Exuma, the sand dollar will be released in Abaco in the first half of 2020.
The bank stressed that the digital currency is not a cryptocurrency or a stablecoin — instead, it’s just a digital version of the existing paper currency, intended to help smooth things over for people without access to a physical bank, according to CoinDesk.
According to the press release, the bank is working to make sure its services are available to everyone and streamlined to be as fast as they can be. That process will entail accelerating payments system reform, adding new categories of financial services providers, and using the digital payments infrastructure to make the supply of traditional banking services accessible to everyone.
There will be limits to the sand dollar, though — while the eventual vision is to streamline and accelerate the process of residents paying retailers with QR codes on their phones, according to CoinDesk.
For now, businesses can’t hold more than $1 million in their digital accounts, and residents max out at $500, according to the project outline. Businesses can’t transact more than one-eighth of their digital wealth per month, either.
Surveys conducted among the public show there is room to improve on residents’ knowledge of financial products and responsible behavior. But in Exuma, where there are high percentages of people with mobile phones, the bank sees a high probability that digital banking is something they’ll use, although it acknowledged that people will need to know they can trust the service.
The press release states the government will benefit from the reduced costs and higher speed of digital transactions, so they’d likely be strong promoters of the service.
While the project takes off in Exuma, the bank will be working to strengthen consumer protection and enact regulations.