Central Bank Digital Currencies (CBDCs) are widely considered the next step in the progress of cryptocurrencies and their adoption on a wide scale. Several countries including China, Canada, and the British Virgin Islands are in various stages of development of their own CBDCs and it is expected that they will be functional in the next few years.
Now, the latest country to provide an update on their CBDC is the Bahamas. This announcement came on October 20, 2020, which stated that their CBDC is now available throughout the country. The CBDC is called the Sand Dollar and this announcement was made on its official Facebook page.
Sand Dollar Now Live
With the project officially becoming live at 10:00 PM UTC, the Bahamas is now the first country in the world to roll out a CBDC, which is available to its 393,000 citizens. The token in question is transferable from one person to another through the use of mobile phones, of which 90% of their citizens own one.
The tokens can be spent domestically, according to the announcement at any merchant “with a Central Bank approved e-Wallet on their mobile device” and transaction fees are “negligible. While this initiative is now being made widely available, it has been in the works for a few years now.
One of the first testings of the token took place on the islands of Exuma and Abaco which have a population of fewer than 25,000 people for whom the pilot program issued 48,000 digital Sand Dollars. The Sand Dollars function essentially as a stablecoin, and is pegged to the US Dollar.
For the Bahamian government, this token is to foster not just domestic spending, but to economically untie the country of around 700 islands. According to Chaozhen Chen, the assistant manager of eSolutions at the Central Bank of The Bahamas, the CBDC would help provide “access to digital payment infrastructure or banking infrastructure” for underbanked and unbanked residents.
The CBDC Race
While the Bahamas has secured the title of the country to first launch a widespread CBDC, they are not the only country in the world that has been working on one. China is currently testing its token in select regions of the country and their CBDC is expected to be rolled out in the next few months. France is also testing out a digital version of the euro. The United States, however, has been noticeably absent from the CBDC race as there are no known plans to develop or launch a digital dollar.
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