The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

More than 75 percent of Exuma businesses have shown interest in participating in trials of the digital Bahamian dollar, the Central Bank's governor says.

John Rolle, speaking at the launch of the six-month "pilot test" on the island, said he had been informed that government and public sector agencies, plus the utility companies, were equally as enthusiastic about joining in with the initiative called "Project Sand Dollar".

Pedro Rolle, the Exuma Chamber of Commerce's president, described the test phase as "critical" for Exuma as it represented "a wonderful opportunity" to bring persons outside the formal financial services system into mainstream banking. He conducted the first digital Bahamian dollar transaction.

"I think that this initiative is critical for us in Exuma, as it would be for any other island in The Bahamas," he said. "It is critical for people on the ground level; for those persons who may not be a part of the banking system, as this gives them a wonderful opportunity to do their banking and keep up with their records.

"It gives them the opportunity to get into mainstream banking in order for them to get loans and to empower small businesses. Based on the number of persons that have signed up and agreed to use it, I think it is really impressive. I didn't think that a large number of them would have signed up to it so easily and readily."

John Rolle said the Bahamian digital dollar, known as a "sand dollar", is not a cryptocurrency. Nor does it work like a traditional debit card. Instead, it is backed by the reserves of the Central Bank.

"A final point to stress is that the sand dollar is not a cryptocurrency. It is a Central Bank digital currency - the digital counterpart to Bahamian dollar notes and coins," he explained. "It has the same value as our printed currency. It can never have a different valuation. It is backed by the foreign reserves of the Central Bank in the identical way as other demand liabilities of the bank.

"A debit card is linked to your money in the bank, and your debit card is just bearing what you are holding, or what is owed to you by your commercial bank. This is really going to be the equivalent of the paper notes and coins that you hold, and those that are liabilities of the Central Bank. So when you are holding currency, you are going to be holding a direct liability of the bank. So it won't be a liability of a financial institution."

John Rolle added: "We will get to the other islands. The opportunity of starting in Exuma is to fine tune the experience. It is to give the payment services firms and the other financial institutions the opportunity to build out and integrate their systems so that they can tie-in.

"In the beginning a lot of people will see an app that looks very generic - the Sand Dollar app. But eventually the payment service providers have their own front-end applications where people would experience sending and receiving funds.

"The importance of the Exuma pilot is to allow us to improve the technology and the experience before sand dollars are distributed nationally. This is a six-month period during which financial institutions will tailor the front-end integration between their systems and the sand dollar network. It will also allow the technology to be more closely integrated with the rest of the banking system."

John Rolle added that the Bahamian digital dollar will be rolled out on Abaco while the Exuma testing is still going on. "The preparation we need to make to enter Abaco is to complete some logistical work," he said. "The way the network operations are going to work is that each person that gets a digital wallet will get a card that is attached to them uniquely."