The Bahamas’ digital currency pilot project will go live in Exuma on Friday. The program will be extended to Abaco in the first half of next year.
Beginning Dec. 27, 2019. Residents of the island Exuma can enrol and receive mobile wallets. The Bahamian government sees the mobile wallets as a means to facilitate the future of payments on the island chain.
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.
This is also a step toward the Bahamas’ long-term goal of launching a fully-fledged central bank digital currency (CBDC). Also called the sand dollar, that larger project would link domestic residents and businesses across a seamless digital payment infrastructure.
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.
The Bahamas’ retail-focused digital currency comes as more governments explore launching CBDC schemes of their own.
The central bank is 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 on the role of both banks and non-banking payments services in the adoption of the digital currency.
It is expected that the Government, as participant and user, would be a strong driving force of digital payments adoption, alongside non-bank payment services providers as the initial lead intermediaries in this space.