Central Bank to introduce digital currency on Abaco
The Central Bank of The Bahamas (CBOB) is considering the early entry of Abaco into Project Sand Dollar, Central Bank Governor John Rolle said yesterday, explaining that the technology of digital currency has the power to make economies more resilient after a natural disaster.
Rolle, who was speaking at the Counsellors Limited’s Exuma Business Outlook at Sandals Emerald Bay, explained that the Central Bank is working on the technical side of Project Sand Dollar for Exuma.
Project Sand Dollar will be the country’s first digital fiat currency.
The digital fiat currency will take the form of a digital wallet, also known as an e-wallet, that would be accessible through a smart phone application.
A digital wallet is a system that securely stores users’ payment information and passwords for numerous payment methods, giving users the ability to complete purchases easily and quickly with near-field communications technology. There is also a plan for a card similar to a credit or debit card, containing the same information.
The digital currency is expected to be piloted on Exuma before the end of the year.
Rolle said that the possible move into Abaco will not hamper the digital currency’s introduction to Exuma.
He said introducing The Bahamas’ first digital currency to Abaco sooner rather than later could allow for a quicker turn-around of the island’s economy.
“It will allow the [Central] Bank to test aspects of the emergency wireless communications features that would enable rapid financial services recovery and to connect with many retail businesses early in their recovery process,” Rolle said.
“The Sand Dollar infrastructure is being designed to connect with bank accounts, so that remote access to these facilities is also quickly re-enabled for deposits and withdrawals.”
According to Rolle, Project Sand Dollar will also remove the country’s dependency on cash, which he said causes recovery after natural disaster to be handled “clumsily”.
“Fully accessible and enabled digital mobile payments would resolve many logistical challenges at once,” he said.
“Project Sand Dollar has the potential to deliver this longer-term resilience.
“It would permit wireless restoration of payments connectively, avoiding the cash shipment and cash handling frustrations. It would permit electronic dispersing of aid and allow families to recapture personal dignity by restoring the flexibility to prioritize the elements of personal need that they prefer to satisfy post-disasters.
“One of the impacts of the recent hurricane on the country’s banking sector was the significant damage to physical structures on Abaco and Grand Bahama, which also shut down operations on those islands. Critical to restoring a sense of commerce is the timely resumption of banking and payments systems.”
Rolle said technology must be a prominent feature in The Bahamas’ resilience and recovery plan, as payment services are needed immediately following a natural disaster, especially as it relates to insurance policy payouts.