CBDC Central Bank Digital Currency Concept.

Key Takeaways:

The Bahamas will mandate commercial banks to support its Sand Dollar CBDC within the next two years to boost adoption.
Despite its early launch in 2020, the Sand Dollar represents less than 1% of the country’s currency, with a significant drop in wallet top-ups.
Other countries, including China and Nigeria, also face challenges in CBDC adoption due to usability concerns and other factors.

The Bahamas is set to mandate commercial banks to support its “Sand Dollar”central bank digital currency (CBDC) to boost its adoption.

Despite being an early adopter, the usage of the Sand Dollar, launched in 2020, has been slow, with the CBDC representing less than 1% of the country’s currency.

Bahamas to regulate banks to offer cbank digital currency https://t.co/1g6Hr1YW0L pic.twitter.com/nZ8zpZdvPX
— Reuters (@Reuters) July 1, 2024

John Rolle, the governor of the Bahamas central bank, announced that regulations requiring banks to distribute the Sand Dollar will be enforced within the next two years.

The adoption of the Sand Dollar has faced challenges, as demonstrated by a significant drop in wallet top-ups, falling from $49.8 million in the first eight months of 2022 to $12 million in the same period in 2023.

This initiative will necessitate substantial technological upgrades for banks.

However, the central bank believes that increasing the adoption of the Sand Dollar and mobile payments is crucial.

The Bahamas is not alone in facing these challenges, as other countries like China and Nigeria also experience lower-than-expected CBDC adoption rates due to usability concerns and other factors.