By YOURI KEMP
Tribune Business Reporter
The Central Bank’s governor says the Bahamian digital dollar will “strengthen defences against money laundering and other financial crimes” because every transaction can be tracked and recorded.
John Rolle, speaking at Project Sand Dollar’s Abaco launch on Friday, said the roll-out will move the Bahamian payments system further away from a cash-based society, thereby improving the security and certainty associated with financial transactions as the island rebuilds following Hurricane Dorian.
Arguing that Sand Dollar will make Bahamian communities, especially those in remote Family Islands, less vulnerable to the “logistical challenges of handling cash, the governor added of Abaco specifically: “We recognise that the economic infrastructure will function more smoothly once payments services are restored to satisfactory levels.
“For businesses that accept cash payments on any significant level, there remains the less-than-full convenience in disposing of cash receipts until the physical banking infrastructure is restored. Equally, in services like construction that dominate the recovery landscape, workers need to have more convenient access to their earnings, especially if they are limited to long queues to cash cheques, or if their employers have to handle unsafe amounts of cash to make payroll.
“Providing the inclusive access of residents to digital payments, we expect, will improve the financial services quality life for those who can participate in this pilot”. Mr Rolle added that the “second purpose” for the Abaco Sand Dollar launch is a “learning opportunity for the Central Bank, the participating financial institutions and our technology providers”.
In particular, he said there was the chance to understand how to improve the quality and reliability of the technology network surrounding Sand Dollar payments while parts of Abaco’s infrastructure are still under repair.
“The Sand Dollar is not anonymous, as neither are credit card or debt card transactions. But our first priority through regulation will be to strengthen data privacy and other consumer protection for both the digital currency and other electronic payments transactions,” Mr Rolle said.
“The Central Bank wants the public to understand that this infrastructure will strengthen Bahamian defences against money laundering and other financial crimes, joining up with other parts of our financial system where transaction monitoring is the norm.”
The governor added: “We want the public to be assured of our obligation and commitment to maintain a secure infrastructure for digital payments. All participants, including the Central Bank, will be subject to independent third-party scrutiny of the resilience of our maintained systems to cyber attacks and other vulnerabilities.
“We will also educate users on the importance of maintaining their mobile phones security to protect the access to funds in their wallets. Although the phone only provides access to digital wallets, and does not store the money, practicing secure phone usage is still important.”
Mr Rolle said that as the Central Bank moves through the Sand Dollar pilot phase it is also “working to enrich the experience by linking up this digital payment infrastructure with the rest of our domestic financial system, especially to make the flow of funds between digital wallets and bank deposit accounts a seamless process”.
K Peter Turnquest, deputy prime minister, said at the launch: “I can remember when Governor Rolle first presented the Sand Dollar to the Cabinet members. Everyone was excited about what this means not only for The Bahamas, but also for the world.
“We are the first country with not just a digital currency, but a Central Bank digital currency, not to be confused with a cryptocurrency. The Sand Dollar is equivalent in every aspect to the paper currency with its value fully backed by the external reserves of the Central Bank. Yes, The Bahamas was the first, and we are very proud of that accomplishment.”
Mr Turnquest added: “For the people of Abaco who would have lost everything, this Sand Dollar now allows them to have easier access to financial services. Through the Sand Dollar, Abaconians can now make payments at local grocers or gas stations right through their mobile devices in real time.
“Additionally, Sand Dollar allows for seamless peer-to-peer transfers. Furthermore, the consumers can feel secure as the Sand Dollar offers multi-factor authentication where they can use facial recognition, biometrics or a password to access their Sand Dollar app on their mobile devices.
“It is also important to note that the Sand Dollar is not anonymous but is confidential. The Central Bank is working diligently to ensure the safety and security of every consumer in the digital sphere.”
Mr Turnquest added that a “number of key components” will be unlocked through the Sand Dollar, including offline functionality following hurricanes and other natural disasters. “Users will be able to make payments or transfers in the absence of Wi-Fi or data capabilities,” he added.
“The Sand Dollar will revolutionise the way business is conducted throughout our islands. Once again, the Government of the Bahamas is in full support of this initiative and we look forward to the continued roll-out in the rest of the Bahama islands.”