Facebook’s Libra might be fading a bit as a perceived threat to monetary systems that have been in place around the globe for centuries. But the race is still on for central banks to develop their own digital versions of fiat to take their place alongside bills and coins.
To that end, the Bahamas may stand out as an epicenter of sorts for the rise of central bank digital currencies (CBDCs). As reported by Reuters, the Sand Dollar – a new digital currency issued and backed by the Bahamian central bank – is now in circulation, and bit by bit, has been making inroads into retail use cases. The newswire noted that purchases at a health-food cafe in that country this week marked the first transactions using the Bahamian digital dollar.
Central Banks Around the World Eye CBDCs
It’s been no secret that central banks around the world have been studying digital currencies or are actively in the midst of developing them. As noted in this space in recent months, a Bank of International Settlements (BIS) survey found that a majority of central banks (more than 80 percent) are exploring CBDCs.
In terms of mechanics in the Bahamas, the Sand Dollar is issued directly into digital wallets that are in turn held by a half-dozen money transfer and payment firms. The coins are then spent through apps.
Notably, as reported by the newswire, the Sand Dollars in circulation total the equivalent of $130,000 U.S. But the Bahamian central bank has said that the digital dollars will eventually be available to all residents.