Bahamas reports reveal that the country’s Central Bank is ready to launch a national cryptocurrency across its archipelago in October
The Bahamas has announced that it is working on plans to establish and institute a sovereign virtual currency, or CBDC, next month. If successful, it will have defeated some of the world’s superpowers to achieve that feat, including China.
Chaozhen Chen (the eSolutions assistant manager at the bank) explained that the objective behind this plan is to achieve greater financial inclusion in remote islands. Electronic currency valued at 1 to 1 with the Bahamian dollar will help connect the distant islands.
“Many residents of these more remote islands do not have access to digital payment infrastructure or banking infrastructure. It was really necessary to customize the effort and the solution to accomplish what we have long needed as a sovereign nation”Said Chen.
Chen further explained in an interview with Bloomberg that the central bank’s digital currency (CBDC) would not be an exception to existing regulations. The CBDC will be treated in the same way, as it will be subject to the same policies that apply to the Bahamian dollar. Chen also noted that money laundering protections and customer knowledge systems (KYC) will be implemented.
The new electronic currency will be generated as demand increases. With regard to its establishment, the CBDC will circulate exclusively in conjunction with the withdrawal of dollars from the Bahamas to alleviate any effects on the money supply.
It was a long journey that began when the Central Bank of the Bahamas revealed its intentions to pilot a CBDC in June 2018.
The central bank pointed out that several smaller islands saw “commercial banks resize themselves and withdraw from their communities, leaving them without banking services“.
The pilot project started last year, with CBDC being tested on two islands: Exuma and Abaco. THE Sand Dollar it is defined with a specific exchange rate with the Bahamian dollar, which in turn is defined with a specific rate with the US dollar. The project was considered a success with 48,000 Sand Dollars launched on the pilot.