The Bahamas is in the launched phase. The Central Bank of The Bahamas launched its CBDC in 2020, but it has largely struggled to gain user adoption. In 2024, the central bank announced commercial banks would soon be forced to distribute the CBDC.

CBDC History and Development

In 2019, the Central Bank of The Bahamas announced the company NZIA Limited was chosen to provide the technology for the CBDC after 30 local and international firms had expressed interest in working on the project. The central bank said it “expects that at the conclusion of this project all residents in The Bahamas will have equal, expanded access to modernised digital payments capabilities. A concurrent reduction in cash transactions is also expected. The evolved Bahamian payments infrastructure should reduce service delivery costs, increase transactional efficiency and improve the overall level of financial inclusion in communities throughout the archipelago.”

On December 27, 2019, the central bank launched the Exuma Pilot. Two months later in February 2020, the pilot was expanded to Abaco to test emergency wireless communication features.

On October 20, 2020, the Central Bank of The Bahamas launched its CBDC (referred to as the Sand Dollar). The CBDC is available for both wholesale and retail applications. On the retail side, the CBDC features a “fully auditable transactions trail (non-anonymous),” “monitoring for fraud detection,” multi-factor authentication, and a “digital ID solution.” The CBDC also allows limited offline use in that users would be able to make “a pre-set dollar value of payments when communications access to the Sand Dollar Network is disrupted.”

The CBDC is supervised, backed, and supported by the central bank. For example, the central bank will promote “a centralised KYC register to maintain identification and profile data that would either mandate or allow individuals who do not maintain such information within banks or licensed intermediaries, to supply the data for the register.” However, front-end services are provided by banks and other financial partners in the private sector. As noted in the promotional material for the CBDC, these businesses are “expected to contribute to the customer due diligence regime; facilitate connectivity of deposit accounts with mobile wallets, and enable foreign exchange transactions.”

What can be done with the CBDC depends on who is trying to use it. Conditions vary for individuals and businesses. For individuals, there are two tiers based on whether a person has identification issued by the Bahamian government. Without government-issued identification, people can only hold $500 at a time and cannot spend more than $1,500 a month. With identification, those numbers go up to $8,000 and $10,000, respectively. For businesses, however, the limit ranges from $8,000 to $1,000,000 so long as they maintain a valid business license and VAT certificate. Access to the CBDC can be gained through the Sand Dollar app after enrolling with an authorized issuer.

Adoption of the CBDC in The Bahamas has been relatively low. In November 2023, the Central Bank of The Bahamas reported that 116,454 consumers and 1,752 merchants had opened wallets—accounting for roughly 28 percent of the population. However, the central bank said transactions were plummeting. In an effort to further adoption, the Central Bank of The Bahamas gave away $116,669 through CBDC promotional distributions in 2023 and announced a “a $20 rebate when [consumers] showed proof of a recent top-up and a $10 rebate when they showed evidence of a current transaction at any of the participating Mall stores.”

In 2024, Reuters reported a conversation with Central Bank of The Bahamas governor John Rolle where governor Rolle said commercial banks would soon be forced to distribute the CBDC.

Human Rights and Civil Liberties Concerns

The Bahamas earned a 91 out of 100 in Freedom House’s 2022 Freedom in the World report. However, some concerns persist in the country. As Freedom House noted in the report, harsh immigration policies and government corruption pose significant problems for The Bahamas. Unfortunately, the adoption of the Bahamian CBDC—the sand dollar—could worsen these issues.

Immigration policies may not immediately come to mind when considering the risks posed by CBDCs, but the surveillance capabilities of a CBDC should not be overlooked here. For example, Bahamian authorities detained over 900 Haitians in September 2021. While Bahamian authorities have turned to roadblocks in the past, a CBDC could allow authorities to establish virtual checkpoints with every purchase. Furthermore, immigrants’ success in the country is limited considering the CBDC has a $500 holding limit and a $1,500 monthly transaction limit if you do not have government identification.

Government corruption, on the other hand, is also present in the Bahamas. Freedom House warned that whistleblowers fear retaliation—a problem that is likely to be made worse by the government having direct access to each person’s financial resources through a CBDC. The Progressive Liberal Party (PLP) promised to create an agency dedicated to combatting corruption, but it has yet to do so since coming to power. The failure to uphold this promise and the state of corruption generally calls into question any promises made to not abuse a CBDC in The Bahamas. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.