The Central Bank of The Bahamas (CBOB) officially introduced its digital currency, the Sand Dollar, to Abaco on Friday as the island continues to slowly put itself back together after Hurricane Dorian left parts of the island in tatters.
With only Commonwealth Bank operating from a makeshift location in Marsh Harbour and the Abaco Cays largely cut off from banking services, CBOB believes the digital currency is the way to financial inclusion for many Bahamians for whom banking services is an inconvenient commute away.
CBOB Governor John Rolle said on Friday that post-Dorian Abaco is a perfect example of the importance of the rollout of a digital fiat currency like the Sand Dollar.
“Abaco symbolizes one of the main reasons why it is important to modernize our domestic payments system and to make it more resilient to the setbacks that will occur from time to time from natural disasters,” Rolle said.
“In this context, the extension of the digital currency pilot to Abaco serves two mutually beneficially purposes. One purpose is to give the community access to a means of making and receiving payments that is not so constrained by the logistical challenges of handling cash.
“Second, the Central Bank wants the public to understand that this infrastructure will strengthen Bahamian defenses against money laundering and other financial crimes, joining up with other parts our financial system where transactions monitoring is the norm.
“Third, we want the public to be assured of our obligation and commitment to maintain a secure infrastructure for digital payments.”
CBOB team members made several purchases using the Sand Dollar at various food stores on Green Turtle Cay and a restaurant on Man-O-War Cay. All the transactions went through flawlessly, using technology that while a learning curve for some, was second nature to others.
Rolle explained that part of the purpose of the digital currency is to remove the challenges associated with handling cash, especially where access to it is limited after a storm, or on islands where commercial banks do not have a presence whatsoever.
“We recognize that the economic infrastructure will function more smoothly once payments services are restored to satisfactory levels,” he said.
“For [businesses] that accept cash payments on any significant level, there remains the less than full convenience in disposing of cash receipts, until the physical banking infrastructure is restored. Equally, with services like construction that dominate the recovery landscape, workers need to have more convenient access to their earnings, especially if they are limited to long queues to cash checks, or if their employers have to handle unsafe amounts of cash to make payroll. Providing the inclusive access of residents to digital payments, we expect will improve the financial services quality of life for those who can participate in this pilot.”
The company providing the technology infrastructure, NZIA, has set up a redundant network that allows the payment system to work even if conventional internet and electricity services are unavailable.
Deputy Prime Minister and Minister of Finance Peter Turnquest, who was on Abaco on Friday with the CBOB team, said the government is in full support of the Sand Dollar initiative and hopes to see it offered across The Bahamas once the pilot is completed.
“We are prepared and committed to ensuring the success of the Sand Dollar on every island of The Bahamas,” Turnquest said.
“Everyone was excited about what this means not only for The Bahamas, but also for the world. We are the first country with not just a digital currency, but a Central Bank digital currency, not to be confused with a cryptocurrency.
“The Sand Dollar is equivalent in every aspect to the paper currency, with its value fully backed by the external reserves of the Central Bank. Yes, The Bahamas was the first and we are very proud of that accomplishment.”
Rolle added, “Only after we have taken the pilot lessons on board will we be ready to look beyond Abaco, Exuma and their neighboring cays.”
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source https://thenassauguardian.com/2020/03/02/sand-dollar-digital-currency-officially-launched-in-abaco/
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