National digital currencies: all behind the Bahamian Sand Dollar

Digital currencies, including cryptocurrencies like bitcoin, stablecoins like USDT and USDC, digital versions of commercial bank money, and state-backed digital central bank currencies (CBDCs) like the new Chinese digital yuan, are constantly at the heart of the attention lately. A recent survey of central banks by the Bank for International Sattlements (BIS) revealed that 86% of national banks are actively thinking about their own CBDC, 60% are experimenting with the technology and 14% are implementing pilot projects. In Asia, China, Hong Kong, Japan, South Korea, Singapore and Thailand are already at an advanced stage and have also launched pilot projects to explore the retail use of CBDCs. Among the major countries in the world, China is the most advanced in development: with seven years of work, the Chinese e-CNY digital yuan, formerly known as the DCEP (Digital Currency, Electronic Payment) project, has already been tested by banks, stores and millions of people across China and will likely launch in 2022. Sweden has taken several steps towards building its central bank digital currency known as e-krona. Sveriges Riksbank, the Swedish central bank, plans to conduct an experiment with the asset: “The pilot test of the e-krona proceeds with the involvement and collaboration of external participants in a test environment”. The experiment sees the cooperation of Riksbank and Handelsbanken, a Swedish retail bank. Riksbank revealed that the e-krona concept uses Corda, a distributed ledger technology solution developed by R3. Sweden has been working on a CBDC for over a year: in April, the central bank announced the conclusion of the first phase of its pilot project. Cambodia is also one of the countries that is doing well in issuing and managing the own digital currency called “Bakong Project”. The project serves as a sharing platform with a p2p option for transferring money. Although, as recently recognized by PricewaterhouseCoopers, the Bahamian Sand Dollar is the first and most advanced form of national digital currency. PwC’s Global CBDC Index 2021 looked at central bank digital currency projects in detail. The Bahamian Sand Dollar “can be owned directly by citizens and businesses as the digital equivalent of banknotes and coins, offering a new platform for exchanging money.” Also adding: “The launch of the pilot phase in December 2019 marked the initiation of the Sand Dollar project by the Central Bank of the Bahamas. The Sand Dollar, the digital version of the Bahamian dollar, was officially launched in October 2020, issued through licensed financial institutions. All residents can access the digital wallet via the mobile application or a physical payment card. Data collected during day-to-day operations, such as income and expense information, can support microloan applications. “With the launch of Sand Dollar,” the Central Bank wants to define its position in the provision of financial services by offering a modern payment system “.