The central bank of the Bahamas will roll out a pilot central bank digital currency (CBDC) in order to bring banking services to all the disparate parts of the island nation.
Bahamas Deputy Prime Minister and Finance Minister K. Peter Turnquest announced the pilot CBDC at the Bahamas Blockchain and Cryptocurrency Conference on June 20.
With over 700 islands, islets and cays, “transportation can be an inconvenience for many, especially the elderly, and costly.” According to Turnquest, “a digital Bahamian currency is especially important for the many Family Islands as they have seen many commercial banks downsize and pull out of their communities, leaving them without banking services.”
Rolling out a CBDC would provide a relatively cheap, accessible, and realistic method of providing banking services to remote locations throughout the many islands of the Bahamas, but it would also play into Turnquests’ vision in which the “Grand Bahama becomes the digital paradise of the region.”
Apart from “increasing efficiency,” Turnquest believes that another benefit of implementing a state-backed blockchain-based digital currency in the Bahamas will be to “eliminate a lot of the human element that facilitates corruption.”
Many other central banks and government across the world are experimenting with or studying the idea of issuing a state-backed cryptocurrency or CBDC. Venezuela became the first country to officially issue a state-backed cryptocurrency when it launched the Petro in February 2018. The Marshall Islands have also announced plans to launch a state-sponsored cryptocurrency called the Sovereign by the end of the year.