The central bank of the Bahamas has announced that its central bank digital currency, the sand dollar, is expected to achieve full interoperability between its various wallet providers within the week.
A recent statement released by the CBoB found that Authorized Financial Institutions or AFIs such as payment service providers are expected to be ready in the coming days.
The AFIs in question, which essentially act as wallet providers and potential issuers of the sand dollar, have undergone rigorous cybersecurity reviews, according to the bank. The institutions that have adopted the bank’s own app have already been cleared for participation, while those that intend to use their own proprietary apps are still being worked on. A deadline of Wednesday is expected to be met.
In October 2020, the sand dollar became the first CBDC in the world to go beyond the pilot phase and get an official launch. The centrally issued digital currency became available to all Bahamian citizens after its release, while integration with the commercial banking system was gradually rolled out. According to the bank, the completion of this integration is now imminent.
“The central bank assumes that the technical integration of the digital infrastructure into the commercial banking system will be completed immediately. This will create connections between wallets and bank deposit accounts through the Bahamas Automated Clearing House (ACH) and allow money to be transferred in both directions, ”the bank said.
So far, nine institutions have been approved as CBDC issuers, including four money transfer companies, three payment service providers, a credit union and a commercial bank. The interoperability between these entities would allow the sand dollar to be spread across a number of different applications and used more efficiently. Each sand dollar is pegged to the value of the Bahamian dollar, which in turn is pegged to the value of the US dollar.
The CBoB also released new draft regulations specifically targeting the way payment service providers interact with the sand dollar, with a supposed focus on consumer protection. The regulation is expected to be completed by May 1st.
“The draft regulation aims to improve the existing legal framework for payment service providers (PSPs) specific to the provision of CBDC (Central Bank Digital Currency) services,” the statement said.