Project Sand is a digital simulacrum of the Bahamas Dollar.
- Project Sand, the digital currency of the Central Bank of the Bahamas, was launched today.
- It is used for domestic transactions.
- It uses distributed ledger technology but is not similar to Bitcoin.
- The Central Bank of the Bahamas today launched its own blockchain-based central bank (CBDC) digital currency, making it one of the first countries in the world to do so.
Called "Sand Dollars", tokens are cryptographic representations of the Bahamian dollar, coined and regulated by the country's central bank, which are integrated into the Caribbean island's payment networks.
Today marks the "gradual release" of the sand dollar, although a representative of the country's central bank told Decrypt that its 385,000 citizens can open Project Sand accounts today and process transactions.
"They can sign up today. And once they have the Sand Dollar wallet in hand, they can start trading - both for the general public and for traders," they said. Prior to today's release, there was a small-scale test that began in December 2019.
The central bank has authorized six financial institutions for the Sand Project: Omni Financial, Kanoo, SunCash, Cash N Go, Mobile Assist and Money Maxx. All but one aired today, the rep said. He added that the central bank will continue to integrate and authorize financial institutions, but that "the [institutions] are really leading this from now on."
The Central Bank of the Bahamas designed the CBDC to supplement cash and improve the country's existing payment system. In a FAQ page for the project, Project Sand states that the country's payment systems would charge users insignificant transaction fees and that the network is protected by high-level encryption protocols and "enhanced KYC/AML standards."
Unlike Bitcoin, Sand Dollar is controlled and coined by the central bank and can only be used for domestic payments. Still, according to the project's white paper, Sand Dollar is based on distributed ledger technology - in this case, a blockchain.
The Bahamas is one of the first countries to introduce a government-backed digital currency. Venezuela has Petro - encryption supposedly backed by barrels of oil; China's digital yuan is currently being tested in Shenzhen; Cambodia's blockchain-CBDC is in testing, but it is delayed, and the Government of the Marshall Islands is considering implementing a cryptocurrency called SOV.
According to a January report by the Bank for International Settlements, more than 80% of the world's central banks are researching CBDCs.