The Sand Dollar, a central bank digital currency (CBDC) developed by the Bahamas, has the potential to “foster financial inclusion and payment system resilience” in the Caribbean nation, a new report from the International Monetary Fund (IMF) has said.
To accelerate the adoption of the CBDC, the IMF suggested in its report that the Central Bank of the Bahamas promotes the digital currency through education campaigns. In addition, the report said that the central bank should strengthen its own capacity on cyber security and other areas to “safeguard financial integrity” as the CBDC is pushed out to more users.
In terms of regulations, the report stated that the IMF sees it as “important” that the Bahamas develops “a robust supervisory and regulatory framework” for digital assets more broadly.
The Sand Dollar was originally rolled out by the Central Bank of the Bahamas in October of 2020, with the bank at the time promoting it as the world’s first CBDC. However, adoption of the CBDC has hardly taken off, with the report claiming that less than 0.1% of currency in circulation on the island nation is currently made up of the central bank-issued token.
In a statement published along with the IMF report, Philip Jennings, Executive Director for the Bahamas, said that the central bank views the Sand Dollar as “an important vehicle for payments systems modernization and resilience, as well as financial inclusion.”
Jennings further blamed the slowdown in the adoption of the CBDC on the COVID-19 pandemic, saying that it “slowed the momentum of public education and roll out to businesses.”
Going forward, however, Jennings said that the authorities plan to accelerate information campaigns and other initiatives to push adoption forward.
“Our authorities welcome the [IMF’s] prioritization of developing internal and external capacity in the area of CBDCs,” the statement said.
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