The Central Bank of The Bahamas (CBOB) has decided to take measures for economic issues that arise after natural disasters by introducing a digital currency in its economic system. The purpose is to free the country from cash dependency.
Central Bank Governor John Rolle announced the early entry into their ongoing Project Sand Dollar. The Project Sand Dollar is basically the formation of a digital fiat currency based on blockchain. The Central Bank of The Bahamas announced this project earlier this year and acknowledged the benefits that digitizing the country’s currency would bring.
The aim is to make transactions easier, efficient, less costly and improve the overall financial structure. The central bank aims to regulate the currency fully by bringing in policies to prevent money laundering, terror financing, and other illicit activities.
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The project was sped up due to the recent natural disasters which shook the economy by cash losses and banks shutting down, which made life very difficult for the citizens. Rolle explained the impacts stating:
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.
In order to free the people from these frustrations, the central bank aims to give the power to the citizens while maintaining order through thorough regulations on the currency and making tight policies. Rolle believed that the restoration process of the financial systems after a natural disaster was clumsy, and the main reason for this is the dependency on cash.
Formation of a digital wallet that holds all the currencies in a secure manner would solve all the logistical issues for once and will help with recoveries. In an attempt of making the economy better, Rolle stated his views:
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.
The central bank aims to operate the digital fiat in a similar way to normal fiat but with the revolutionized benefits of blockchain. The currency’s wallet would also be providing a card that would operate much like a credit card. Although the central bank’s main purpose is to promote technology and elevate the country’s economy, the recent conditions of the natural disaster have made them center all this project around recovery processes and speedy launch.
The concept of digitizing fiats is moving across continents. Apart from the Bahamas, Binance has also helped bring Nigerian currency to the blockchain which also signals that the future of fiat also lies in digitizing and regulations.