Banks Are Compelled to Distribute Sand Dollar
One of the leading central bank digital currencies (CBDCs) since 2020, the Sand Dollar of the Bahamas, is stepping up efforts to make sure of its wider adoption by forcing commercial banks to distribute this digital currency.
A Reuters report from June 2 indicated that the Bahamas central bank chief, John Rolle, is set to legally bind commercial banks to distribute the Sand Dollar
In a bid to increasing adoption since the present uptake remains low. These CBDC regulations would take effect within two years.
“We envision a process in which all banks will participate and be required to offer their customers access to the central bank digital currency,” Rolle said, putting emphasis on the requirement.
Current Adoption Rates
The Sand Dollar, however, has always witnessed lukewarm adoption since its infancy days of issuance. At this moment, it accounts for less than 1% of all outstanding currency.
Between January and August of last year, top-ups into Sand Dollar wallet accounts fell from the scale of $49.8 million down to just $12 million.
Background Challenges.
The Bahamas won’t be the first to adopt CBDCs. For instance, even in the pilot use of e-CNY by government employees in China, most still preferred traditional cash due to usability concerns and surveillance issues.
In Nigeria, the adoption of the central bank digital currency, eNaira CBDC, continues to struggle.
less than 1% of those who have bank accounts ever held an eNaira wallet in the first place, and only 1.5% of this wallet base is active on a weekly basis.
Technological Overhaul for Banks
This mandate will also entail extensive technology upgradation at the end of commercial banks. The Bahamas central bank believes there is no choice but to promote CBDCs and mobile payments for the future of the nation’s financial system.
Forcing all banks to support the Sand Dollar brings digital currency much closer to the citizens of the Bahamas.
In Conclusion, the Bahamas securing commercial banking support for the Sand Dollar underlines the commitment to lead global digital currency adoption.
By solving existing technological challenges, Bahamas is leading the way towards general usage of CBDCs and has pointed out associated benefits.
