By YOURI KEMP
Tribune Business Reporter
Commercial banks yesterday gave their backing to the Bahamian digital dollar's national roll-out as a means to improve financial inclusion and transaction efficiency.
Lasonya Missick, Royal Bank of Canada's (RBC) Bahamas managing director, reacting to the Central Bank's decision to begin the nation-wide launch on October 20, told Tribune Business: “Digital currencies such as the Sand Dollar can provide opportunities, more convenience, and more flexibility for businesses and consumers.
"Digital currency also has the ability to eliminate geographical constraints as it can be exchanged using multiple mechanisms which do not necessarily require face-to-face presence between the sender and receiver, while remaining low-cost and almost instantaneous.”
Ms Missick added that it was "too early to say" how quickly Bahamian consumers and businesses will start to use the Bahamian digital currency, which the Central Bank calls the Sand Dollar.
“The Bahamian community needs to be 'on board' with the idea of a digital currency in order for it to be successful," she said. "Driving adoption will be key to creating sufficient critical mass for widespread use of the Sand Dollar.
"Governments, banks and consumers all have a role to play. As the government and Central Bank continue to work towards implementation of the Sand Dollar, RBC will keep working with them as a key stakeholder in this process.”
Roger Archer, Scotiabank (Bahamas) managing director, added: “We are supportive of the Sand Dollar initiative. This is an excellent initiative which places The Bahamas at the forefront of transaction transformation.
"This will help to lower the cost of transacting across our archipelago, and lead to greater financial inclusion. Along with the banking and payment community, we continue to work on the interoperability of the Sand Dollar with traditional payment systems and, while this will take some time, we are very excited about the opportunities ahead.”
The Central Bank earlier this week said it plans to expand the Bahamian digital dollar beyond the pilot islands of Exuma and Abaco by making it accessible through authorised financial institutions (AFIs) that come under its oversight.
Eight financial institutions, including one commercial bank, four money transmission businesses and three payment services providers, have already been "on-boarded" as AFIs able to offer digital Bahamian dollar services through either their own electronic apps or the Sand Dollar app. These apps are now undergoing a cyber security assessment to ensure they cannot be breached by hackers.
The Central Bank pledged that such testing will be "robust and intensive", with all AFI providers scrutinised for security by an international firm before they gain approval to link to the Sand Dollar platform with their own apps. This comes after surveys showed consumers and businesses needed "assurance around the safety of conducting online transactions."
"Six AFIs are in the final stages of this cyber security assessment; which evaluates their custom apps; the overall security posture of the business; and reviews the coding practices applied in application development," the Central Bank said.
"As to security, Sand Dollar-integrated wallets are enabled with multi-factor authentication features. All mobile devices are required to support a device passcode or biometrics to access the app and complete transactions."
All financial institutions supervised by the Central Bank can operate as sponsors of mobile wallets for the Sand Dollar initiative, and maintain clearing accounts with it, including commercial banks, credit unions, money transmission providers and payment services providers.
The Central Bank said it expected commercial banks and credit unions will initially facilitate the connection between a person's mobile wallet and bank account. It suggested that their offering actual digital wallets themselves would only likely start in 2021.