The Bahamas’ digital currency pilot program went sleep in Exuma on Friday.
Residents of the island can now enroll within the financial institution of The Bahamas’ “Project sea urchin ,” which began Dec. 27. they’re going to receive mobile wallets the Bahamian government sees as facilitating the longer term of payments on the island chain. Central bankers announced the debut on Tuesday.
Bankers said “Sand Dollar” may be a “digital fiat currency” – not a cryptocurrency, stablecoin or competitor to the Bahamian dollar . Instead, it’s simply a digital version “equivalent in every reference to the paper money ,” they said within the project outline.
But it’s also a step toward the Bahamas’ long-term goal of launching a fully-fledged financial institution digital currency (CBDC). Also called the sea urchin , that larger project would link domestic residents and businesses across a seamless digital payment infrastructure.
In this vision, residents pays retailers through wallet-linked QR codes, with banks moving funds in digital form. The financial institution believes this might ultimately cut currency printing costs and transaction fees while enhancing financial inclusion.
“A widely adopted CBDC would place users at less risk of violent crimes that focus on holders of money , and potentially reduce security and insurance costs related to keeping cash on business premises,” consistent with the outline.
For now, however, the sea urchin faces much more restrictive limits from the govt . Businesses cannot hold quite B$1 million in their digital wallets, nor can they transact quite one-eighth of their annual business through the wallets in any given month. And individuals reach at B$500, with higher limits coming through “enhanced due diligence” on their accounts.
The financial institution “will vary these limits over time as could also be necessary,” consistent with the outline.
The Bahamas’ retail-focused digital currency comes as more governments ready CBDC schemes of their own.
Sweden’s Riksbank is building its long-awaited “e-krona” in partnership with consultancy Accenture while China appears to get on the verge of launching a CBDC next year.