Hurricanes have been causing extensive damage to the islands of the Bahamas for millennia. The Central Bank of the Bahamas plans to pilot the first cryptocurrency in the form of Sand Dollars. Project Sand Dollars offers numerous benefits that can help individuals and businesses to…
Hurricanes have been ravaging the Bahamas for centuries. According to travel advice website TripSavvy, a hurricane passes close to the Bahamas every other year on average. In addition, a hurricane makes a direct landfall on the islands once every four years on average. Natural disasters can be a big-time hassle for tourists. What’s worse is that these storms often devastate the Bahamas’ ability to conduct trade and commerce.
On Sept. 1, the Grand Bahama Island and Abaco Islands were struck by one of the strongest hurricanes in history. Hurricane Dorian is a category five storm that packed sustained winds that reached 185 miles per hour. In addition to the strong gusts of wind, Hurricane Dorian summoned storm surges that formed water walls as high as 20 feet. According to Hubert Minnis, prime minister of the Bahamas, the storm system left a “generational devastation” on the islands.
The damage caused by natural disasters, combined with the widespread use of cash, prompted officials of The Central Bank of the Bahamas (CBOB) to consider adopting the country’s first digital fiat currency.
The CBOB has announced that it will roll out “Sand Dollars” before the end of the year. This is a digital fiat currency. Sand Dollars will be piloted on Exuma but officials are also considering an early release on Abaco. Although Sand Dollar is a cryptocurrency like bitcoin or Ethereum, it offers unique characteristics.
According to officials, Sand Dollars will be introduced in the form of a digital wallet or e-wallet. Users will be able to access it through a smartphone application. The digital wallet will also offer security features that enable users to safely save payment details as well as passwords for various payment methods. These functionalities allow users to complete transactions using near-field communications technology.
The CBOB has partnered with NZIA Limited, which will provide the “national infrastructure for payments,” said Jay Joe, chief executive of the decentralized wireless payment systems company.
Central Bank Governor John Rolle said Project Sand Dollar can potentially improve the resilience of the country when facing natural disasters.
In a report by the Nassau Guardian, Rolle said,
“fully accessible and enabled digital mobile payments would resolve many logistical challenges at once.”
The central bank governor added that Project Sand Dollar would offer the following benefits:
Rolle also said,
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.
The central bank governor expects the digital fiat currency to be the panacea that will help citizens and businesses access payment services after a powerful hurricane, like Dorian, ravages the country. For individuals, having a reliable payment system after a natural disaster means they can purchase resources that can address their needs. For businesses, it could mean immediate insurance payouts.
This article was edited by Sam Bourgi.
Last modified: October 28, 2019 1:50 PM UTC