Bahamas wants to force banks to back its ‘sand dollar’ CBDC

The Bahamas is preparing to introduce legislation that would require commercial banks to support the “sand dollar” central bank digital currency (CBCC) and boost its adoption.

In a report from Reuters on June 2, Governor of the Central Bank of the Bahamas, John Rolle, said that commercial banks are now being told that they are now legally required to issue CBDCs because they have been deemed inappropriate by the current CBDC. digital money.dwindl

Rolle said the CBDC rules should be ready to go into effect sometime in the next two years.

“We see a process where all commercial banks will eventually be in that position and they will be forced to have access to a central bank digital currency for their customers,” Rolle added.

Acceptance of the sand dollar has been somewhat weak in the country, with the CBCC reportedly accounting for less than 1% of the currency in the Bahamas – even if it enters 2020.

Meanwhile, the total sand dollar wallet size between January and August last year fell to $12 million, down from $49.8 million during the same period in 2022.

Requiring commercial banks to distribute sand dollars will mean a significant technological upgrade for individual banks, but the Central Bank of The Bahamas says the widespread adoption of CBDC and mobile payments is critical.

The Bahamas is not the only country to see lower than expected CBDC adoption rates.

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Several civil servants enrolled in China's CBCC pilot program said in May that they would prefer to spend their digital “e-CNI” over traditional cash due to limited use and government surveillance.

Nigeria, the pioneer of CBCC in Africa, is facing similar problems.

Despite several attempts to increase adoption, the country has seen a decline in CDC adoption rates among its citizens. In the year By mid-2023, less than 1% of Nigerians with bank accounts had eNaira wallets, and less than 1.5% of wallets were active on a weekly basis.

The Bahamas was the first country in the world to introduce a CBDC in October 2020, giving all its 393,000 residents a “sand dollar” digital currency.

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