By 
The Bahamas is preparing to enact legislation that will require commercial banks to support its central bank digital currency (CBDC), known as the “Sand Dollar,” in an effort to boost its adoption.
John Rolle, the governor of the Bahamas Central Bank, stated that due to the underwhelming uptake of the CBDC so far, commercial banks will soon be legally mandated to distribute the digital currency. Rolle mentioned that the new regulations should be ready for enforcement within the next two years.
“We foresee a process where all commercial banks will eventually be required to provide their clients with access to the central bank digital currency,” Rolle added.
The Sand Dollar, introduced in 2020, has seen limited adoption, accounting for less than 1% of the currency in the Bahamas. The total volume of Sand Dollar wallet top-ups fell to just $12 million between January and August last year, a significant drop from $49.8 million during the same period in 2022.
While requiring commercial banks to distribute the Sand Dollar would necessitate substantial technological upgrades, the Bahamas Central Bank emphasizes the importance of boosting CBDC adoption and promoting mobile payments more broadly.
The Bahamas is not alone in facing challenges with CBDC uptake. Other countries have experienced similar issues. For instance, several government workers in China’s CBDC pilot program expressed a preference for converting their digital “e-CNY” to traditional cash, citing limited usability and concerns about government surveillance. Similarly, Nigeria, the pioneer of CBDCs in Africa, has struggled with low adoption rates. As of mid-2023, less than 1% of Nigerians with bank accounts had eNaira wallets, and fewer than 1.5% of those wallets were active on a weekly basis.
The Bahamas was the first country in the world to introduce a CBDC, issuing its Sand Dollar digital currency to all 393,000 residents in October 2020.
Comments