Complete Bahamian digital dollar roll-out by year-end

By Farah Johnson

Tribune Reporter

fjohnson@tribunemedia.net

THE Central Bank's governor yesterday confirmed that the digital Bahamian dollar will be rolled-out throughout all islands during the 2020 second half after being introduced to Abaco by month's end.

John Rolle, pictured, addressing a Bahamas Chamber of Commerce and Employers Confederation (BCCEC) breakfast on Project Sand Dollar, said the test initiative - which began in Exuma in December - will be extended to Abaco to "accelerate the provision of financial services needed to support business sector recovery".

"Abaco actually was the first choice for the digital currency pilot," he added, "but we felt that what was missing from Abaco was that the financial inclusion, or financial access issue, wasn't as stark in the sense of all of the banks being present. But in terms of ecosystem, it would have been just as rich."

Mr Rolle said some "interesting experiences" can come out of Abaco when it comes to using the digital Bahamian dollar to conduct and settle financial transactions as the island is still recovering from Hurricane Dorian.

He added that the Central Bank is still in the process of enrolling all the 1,200 persons who signed up for the pilot in Exuma, while there are a further 2,000 who have expressed interest in participating in the initiative there.

"When we went into Exuma for the project we started out with three of the payment services providers and the on-island commercial bank, but at this point we have eight financial institutions in total who are in varying stages of participation in the pilot," Mr Rolle said.

"Since it is card-based that put an immediate limit on how many persons can participate because originally we thought we'd focus on only having 500 persons in the pilot, and so trying to accommodate this number is already over-stretching the limits."

Still, Mr Rolle said the Central Bank will be in position to enroll more participants without the requirement for a card in "very short order". He also confirmed that the delay in card distribution, which caused a suspension of new Sand Dollar registrants, is over.

"We're also addressing a different approach, which will be enabled within two-and-a-half to three weeks," Mr Rolle said. "Once the PSPs or the payment providers are correctly integrated into the infrastructure, we'll be able to do the digitally-enabled tokens for accounts to be activated."

He explained that the pilot programme's goal is to create an infrastructure that "provides for the interoperability of payment services".

"We're looking at a digital representation of our currency. It's not a different currency; it's the same currency. In law, it will never be different. It can't differ in value in any way or the other so Sand Dollars can never be priced different from Bahamian dollars," Mr Rolle said.

He added that while the digital currency is intended for domestic use, it was possible it could be linked with foreign currency. This, though, could only be done "where there is an explicit buying and selling of foreign exchange behind the scenes to accomplish that".

"While in terms of the timeline The Bahamas might be a little bit ahead of some countries, we're not alone in this. Central Banks around the world are looking at the issue of digital currency, and they're looking at it from different point of views," Mr Rolle said.

"We're not going to get to the rest of the Bahamas until the second half of the year, and that is predicated on certain things like during the pilot looking at a lot more issues around the technology infrastructure, making sure that the legal framework is more elaborated around regulations etc, and spending some time dealing with a lot of the cyber issues."

Jerry Butler, former executive director of the Inter-American Development Bank (IDB) for Caribbean countries, said he believes the Sand Dollar project can help The Bahamas catch up with the rest of the world.

"It is foolish for the sheep to declare that we should all remain vegetarians if the lion is of a different impression, and right now the lion is the rest of the world and they are moving quite quickly towards digitising itself, introducing digital fee access currencies and also using block chain technology to increase the focus efficiency and record-keeping of the way that we do business," he said.

Delphino Chassar, head of business development in financial technology at Equity Bank and Trust Bahamas, said he was optimistic about the digital transformation.

"We want to essentially be as cooperative as possible and complement the process. We fully support the Central Bank, and we're looking for compliant ways to assist. Once those pathways become clear and enshrined it seems to suggest that this process won't be substitutability but complementary," he added.