YEREVAN (CoinChapter.com) — The Bahamas is taking steps to increase the adoption of its central bank digital currency (CBDC), the Sand Dollar. Launched in 2020, the Sand Dollar aims to modernize the nation’s financial system. However, uptake has been slower than expected, prompting new legislative measures.
Banks to Be Legally Required to Support Sand Dollar
To boost the Sand Dollar’s adoption, the Bahamas is preparing legislation that will require commercial banks to support the CBDC. John Rolle, governor of the Bahamas central bank, stated,
“We foresee a process where all of the commercial banks will eventually be in that space and they will be required to provide their clients with access to the central bank digital currency.”
These new regulations are expected to be enforced within the next two years, giving banks time to implement the necessary technological changes.
Limited Adoption: Sand Dollar Usage Drops in the Bahamas
Despite being one of the first countries to launch a CBDC, the Sand Dollar’s adoption in the Bahamas has been limited. The digital currency reportedly accounts for less than 1% of the total currency in circulation. This low adoption rate is a concern for the central bank.
Data shows a sharp decline in the volume of Sand Dollar wallet top-ups. From January to August last year, the total volume fell to $12 million, down from $49.8 million during the same period in 2022.
China and Nigeria Also Face Low CBDC Adoption Rates
The Bahamas is not alone in facing challenges with CBDC adoption. Similar issues have been reported in countries like China and Nigeria. In China, some government workers participating in the CBDC pilot program prefer converting their digital yuan back into traditional cash. Concerns about limited usability and potential government surveillance contribute to this preference.
Nigeria, a pioneer of CBDCs in Africa, also faces hurdles. Despite efforts to promote the eNaira, adoption rates remain low. As of mid-2023, less than 1% of Nigerians with bank accounts had eNaira wallets, and only 1.5% of these wallets were active weekly.
Bahamas Mandates Sand Dollar Support to Build Inclusive Financial System
Above all, by mandating the support of the Sand Dollar, the Bahamas intends to create a more inclusive financial system. Introduced to all 393,000 residents of the Bahamas in October 2020, the Sand Dollar marks a significant milestone in the country’s financial history. Notably, despite its slow uptake, the central bank remains committed to its success. The forthcoming legislation aims to integrate the Sand Dollar more fully into the financial ecosystem.
