The Bahamas CBDC Tracker

The Bahamas is in the launched phase. The Central Bank of The Bahamas launched its CBDC (known as the Sand Dollar) 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 its 2018 annual report, the Central Bank of The Bahamas announced “Project Sand Dollar”—an effort to develop and introduce a Bahamian CBDC. Central Bank of The Bahamas governor John Rolle wrote, “This initiative should allow both residents and visitors to seamlessly access digital payment services, promote interoperability across private providers of payment services, and enable more access to traditional banking services.” The report further explained that the central bank intended to pilot the CBDC by 2020 and that it worked with other government agencies “to promote the development of a national digital identity infrastructure, which is an essential complement to a mobile retail payments infrastructure, and also allows for expanded access to domestic financial services, that would comply with stringent international AML/CFT standards.”

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.”

The central bank launched the Exuma Pilot on December 27, 2019.

In its 2019 annual report, the Central Bank of That Bahamas celebrated being “in the lead among countries around the world to develop and issue a [CBDC] for general or retail use.” The report explained that two major objectives of the CBDC were improving financial inclusion and strengthening “national defences against money laundering and other illicit activities that are more easily perpetuated by cash.”

On February 28, 2020, the CBDC pilot in Exuma was expanded to Abaco. Reflecting on the expansion, the central bank wrote, “After internalizing the lessons from the pilot, the Bank expects to make sand dollars accessible to all residents of the archipelago.”

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.

In its 2020 annual report, the Central Bank of That Bahamas published conflicting data. Page 15 of the report states that there was B$130,000 ($130,000) of CBDC in circulation. However, page 99 of the report states that there was B$75,125 ($75,125) of CBDC in circulation. Aside from this issue, the central bank further reported that the COVID-19 pandemic had harmed the CBDC pilot by “sever[ing] direct physical contacts with the pilot communities.” Therefore, “the Central Bank shifted its focus to further development of the core infrastructures and the security posture of both the Sand Dollar system and the participating financial institutions.” During 2020, the central bank spent B$6,173,721 ($6,173,721) on the CBDC.

In its 2021 annual report, the Central Bank of That Bahamas said 2021 was a “momentous year” because “the Bahamian Dollar Digital Currency Regulations… became law.” According to the report, the value of the amount of CBDC in circulation increased to B$304,000 ($304,000). However, the central bank acknowledged that the CBDC “remained in low adoption.” The central bank wrote, “COVID-19 continued to impact the Bank’s ability to launch any major form of in-person promotions or marketing efforts of Sand Dollar.” However, the central bank “continued its collaboration with the Government to use Sand Dollar as a method for collections and disbursement of payments.” These efforts included “enabling digital currency receipting on the Government’s DigiPay platform,” “planning around phased acceptance of payments at various public facing services outlets,” mobilizing “public relations,” and working with a “local public relations agency to strategize and coordinate on initiatives to encourage Sand Dollar adoption.”

In November 2022, Central Bank of The Bahamas governor John Rolle delivered a speech at the Digital Euro Conference to share four lessons from the Bahamian experience. First, governor Rolle said, “[E]xpanding the merchant network is important to accelerated adoption.” Second, he said CBDCs must be able to be seamless integrating into the existing system for people to want to use them. Third, governor Rolle said, “[E]nlisting participation from the traditional banking sector and credit unions is important.” And fourth, governor Rolle said it’s important to educate users.

In December 2022, a new feature was added to the CBDC: integration with the automated clearing house. This update made it so people could move money between their bank accounts and their CBDC wallets. The Central Bank of the Bahamas “subsequently mandated SandDollar Authorised Financial Institutions (AFIs) to extend the feature to their proprietary platforms, with a targeted completion date of the end of the first quarter 2023.”

In its 2022 annual report, the Central Bank of That Bahamas reported that the value of the CBDC in circulation had risen to B$1,052,459 ($1,052,459). Once again pointing to the pandemic, the central bank wrote, “Given the relaxation of COVID-19 protocols, there was some resumed in-person educational and marketing campaigns, toward increasing use and awareness of [the Sand Dollar].” Pointing to the banks permitted to open digital wallets for customers, the central bank further said, “Until 2022 however, most [of the seven authorized banks] undertook very limited customer enrolment efforts.” With that said, the central bank wrote that it was “now poised for an increased emphasis on adoption in 2023.”

The 2022 annual report also detailed the holding limits for the CBDC. To “satisfy internationally robust AML/CFT standards” and achieve “national financial inclusion goals,” the central bank adopted a tiered wallet. Under the first tier, opening a CBDC account only requires “basic user information and contact details.” These accounts, however, are subject to a B$500 ($500) holding limit and a B$1,500 ($1,500) monthly transaction limit. Under the second tier, opening a CBDC account requires government identification. Compliance increases the holding limit to B$8,000 ($8,000) and increases the monthly transaction limit to B$10,000 ($10,000). The final tier is for registered businesses. The holding limit for these accounts can be as high as B$1 million ($1 million) and there is not transaction limit.

In April 2023, the Central Bank of The Bahamas announced it would begin issuing monthly updates to “keep the public more informed of initiatives to promote digital currency adoption.” The central bank also announced plans to give away B$1 million ($1 million) in CBDC. As documented below, the updates continued until December 2023 with one additional follow up in February 2024. However, there was no update for June 2023.

In May 2023, the Central Bank of The Bahamas issued an update. It announced new top-up features and the beta testing of a “white-labelled Wallet 2.0 for automatic self-onboarding of users to lower KYC (Tier I) wallets.”

In June 2023, the Central Bank of The Bahamas did not issue a monthly update.

In July 2023, the Central Bank of The Bahamas issued an update. It noted that the mobile app was “undergoing a facelift” to “include new features and promote a more pleasant user experience.”

In August 2023, the Central Bank of The Bahamas issued an update. Based on the report, it seems the bulk of activity is centered on government officials using the CBDC. The central bank wrote, “Comparative mobile payments trends continued to be impacted by the significantly reduced levels of Government transfer payments. Absent these transfers, total wallet top-up reached $7.1 million in the first five months of 2023, compared to $38.4 million during January to May 2022.”

In September 2023, the Central Bank of The Bahamas issued an update. It said the “SandDollar rebate program remained an essential aspect of adoption efforts.” The program worked as follows: “During each selected day of the campaign, the first 100 consumers arriving at the establishment with an activated SandDollar-enabled digital wallet received a $20 top-up [and] customers who had spent $18 or more SandDollars inside the store received an additional $5 top-up (rebate).”

In October 2023, the Central Bank of The Bahamas issued an update. The report said, “During the first seven months of 2023, a more than four-fold reduction in wallet top-ups to $10.2 million was registered, in comparison to the previous year when government transfer payments significantly influenced retail activity.”

In November 2023, the Central Bank of The Bahamas issued an update. The update largely focused on highlighting efforts by central bank officials to appear at conferences and other social gatherings to promote the use of the CBDC.

In December 2023, the Central Bank of The Bahamas issued an update. Like the previous update, it largely highlighted efforts by central bank officials to appear at conferences and other social gatherings to promote the use of the CBDC.

In its 2023 annual report, the Central Bank of The Bahamas provided a few notable updates on the CBDC. As of December 31, 2023, the central bank had spent B$10,311,852 ($10,311,852 ) on the CBDC. At the same time, the amount of CBDC in circulation had reached B$1,691,858 ($1,691,858). However, taken together, these figures suggest that the central bank had spent B$6 on every B$1 of CBDC in circulation.

Although no update was published in January, the Central Bank of The Bahamas issued another update in February. A spokesperson for the central bank confirmed over email that this update was the last one in the series. The update noted that the central bank had launched a “SandDollar Holiday Rebate program” to promote the use of the CBDC. During the 2023 calendar year, approximately B$160,000 ($160,000) was “disbursed through incentives and promotional distributions.” However, the central bank also said that usage of the CBDC was “dampened by reduced government transfer payments.” Finally, the update noted that, as of December 2023, there were 118,955 personal wallets created.

In the summer of 2024, Reuters reported a conversation with Central Bank of The Bahamas governor John Rolle, in which 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.