The Central Bank of The Bahamas approved Digital Sand Dollar is on its way
LionPress Summer 2019 Issue
The Digital “Sand Dollar”
In the Bahamian Government’s endeavor to encourage the ease of business and the greatest accessibility of banking services throughout the country it has embraced the concept of a state digital currency. The backing of the Central Bank of The Bahamas of the state digital currency coined as the Digital “Sand Dollar” on a one to one basis with the $Bahamian Dollar (which is pegged one to one with the US Dollar) brings significant confidence to businesses, financial intermediaries and individuals in the general public wishing to transact with it.
This backing will support avid adoption by a growing network of businesses locally creating an active ecosystem of vendors who will accept the Digital Sand Dollar, over and above other independent digital currencies and stable coins.
It is speculated that there will be avenues for existing digital currencies and stable coins to convert into the Digital Sand Dollar. In particular, among the prominent vendors who have publicly announced that they will accept the Digital Sand Dollar are popular utilities providers Cable Bahamas and Aliv, responsible for television, internet and telecommunications services widely.
The Digital Sand Dollar is scheduled to be introduced via a pilot test in the island of Exuma by next year according to the Governor of the Central Bank of The Bahamas, John Rolle, following which it will be rolled out throughout the Bahamas after 2020 having perfected any lessons learnt.
The Expression of Interest (EOI) tender for the Project Sand Dollar initiative which was revealed last August 2018, noted that the intention for the launch of a digital fiat Bahamian Dollar is scheduled to take place by 2021.
In the application of this digitally advanced form of payment, the Bahamian regulatory framework is keen on prioritizing integrative measures against terrorist financing and money laundering. The Government is currently considering a draft Central Bank of The Bahamas Bill, 2019, in anticipation of the unveiling of the Digital Sand Dollar setting out the appropriate regulations to govern the new instrument. In addition to the aforementioned, the governance model set forth will include safeguards in consideration of Exchange Control Rules and synergistic specifications outlining the complementarity rather than substitutability of traditional banking functions.
The Central Bank of The Bahamas has announced that it has selected NZIA Limited as its preferred technology provider – victor among 30 bidders – to create and implement the Digital Sand Dollar, the name of which is deduced from the title of the official initiative for the modernization of the payments system “Project Sand Dollar”. NZIA Limited has a reservoir of expertise in robust Internet of Things networking solutions and enterprise blockchain applications. Its genesis stems from IBM in conjunction with Zynesis Pte. Ltd, a Singaporean software development company with a niche focus on blockchain solutions. A conversation between the Managing Director of NZIA Limited and the Head of Business Development at Equity at an event revealed that the company is looking to collaborate with local technology companies and financial intermediaries for the most coherent integration of the Digital Sand Dollar.
It is envisioned that this state-owned digital fiat currency will lead to more instantaneous transactions while reducing service delivery costs locally and encourage more modern interfaces for payments to be made inclusively throughout the islands.
Equity Bank And Trust Bahamas is excited about this new wave of innovation in the country, and looks forward to cooperation with the Government, regulators, NZIA Limited and Bahamians for the smooth adoption of the Digital Sand Dollar throughout The Bahamas.