The central bank announced that the sand dollar, the digital version of the Bahamian dollar, will gradually be rolled out outside of the two original pilot regions from 20 October through authorised financial institutions.
The aim of the project is for all Bahamian residents to be able to use a central bank digital currency, on a modernised technology platform, "with an experience and convenience — legally and otherwise — that resembles cash", even though they should not expect the anonymity that comes with its use.
"It is expected that this will allow for reduced service delivery costs, increased transactional efficiency, and an improved overall level of financial inclusion," the central bank said.
The central bank said that the first phase of the rollout, "focused on the immediate readiness within the private sector", will cover all three tiers of authorised accounts. The second phase, which is expected for early to mid-2021, will target government services and public utilities.
Further, the sand dollar has undergone a "rigorous cybersecurity assessment" so as to reassure the public about the safety of conducting online transactions. The digital currency's infrastructure is also said to incorporate strict attention to confidentiality and data protection.
"Each wallet provides a unique set of data encryption to ensure privacy and confidentiality. However, all transactions are linked to an anti-money laundering/counter financing of terrorism (AML/CFT) engine to safeguard regulatory compliance and governance," the central bank said.
The central bank added that the digital currency framework will rely on an evolved regulatory structure for domestic payments and other financial services. It said:
"The Central Bank remains actively engaged with stakeholders to ensure that the legal framework develops in tandem with payments systems needs. The Central Bank is also ensuring that adequate safeguards and policies are imposed to address the integrity of financial transactions, aligned with best international standards for AML/CFT and that resilient mechanisms are instituted to preserve financial stability and maintain private financial institutions’ central role in the financial intermediation process. As such, draft regulations are under final review and will be crystallised in the public space over the month of October."