NASSAU, BAHAMAS — The Central Bank is ramping up efforts to expand the number of local merchant accepting Sand Dollar payments so as to accelerate adoption of the digital currency ,according to Central Bank Governor John Rolle.
He also revealed that a retail bank is piloting the system and a major credit union is on its way to becoming a provider of Sand Dollar wallets.
Rolle, during recent remarks at the Digital Euro Conference noted that in a population of under half a million, it is estimated that less than 20 percent of adults make use of e-money wallets.
“These individuals only make low frequency, low average value use of such mobile wallets. All of such wallets now with have access to Sand Dollars. That compares to about no more than 70 percent of adults who engage more frequently and at higher average transactional values in retail payments with credit and debit cards,” Rolle said.
According to Rolle, efforts in the Bahamas to encourage CBDC adoption are still in the “very early stages.” He added: “Although Sand Dollar circulation is still less than one percent of issued currency it understates public interests, because e-money issued by non-banks is also present and we anticipate that such balances will convert fully to Sand Dollars, as the cross-platform movement of funds increases. But e-money penetration is also still low.”
Rolle noted that expanding the merchant network is important to accelerated adoption. He explained that the Central Bank’s efforts will include direct outreach to the business community, with “an education focus on the benefits of reducing reliance on physical cash in commerce.
“In the next version of our core application, the Central Bank of the Bahamas will add more features to allow financial institutions to seamlessly structure and manage merchant fee arrangements. For merchants, more access to basic data analytics will also be featured.”
Also highlighted was the importance of interoperability with the traditional banking system for merchants, who need to treat the Central Bank digital currency revenue like any other form of receipt.
“The Central Bank has just completed the two-way linkage between the banking system, through the Automated Clearing House or ACH. This solution has now been released for financial institutions to build into their proprietary interfaces with the digital currency platform,” said Rolle.
He added, “Participation from the traditional banking sector and credit unions is important. That process has started. One of the 6 retail banks has already began to pilot the system. Also, one of the largest of the 5 dominant credit unions has completed the technology systems assessments to become a provider of Sand Dollar wallets. However, the Central Bank has also had to manage its own staffing capacity, in sequencing such engagements.”
Rolle added that user education is important, and said the Central Bank is crafting its message to inspire user confidence, especially around data protection, cybersecurity, and ease of use.
