FinTech: Mastercard And Island Pay Debut A Card Linked To The Bahamas CBDC
The Bahamian central bank digital currency (CBDC), dubbed the Bahamas Sand Dollar, went live in October.
Bahamians can now have the Bahamas Sand Dollar, the country’s CBDC, loaded onto a prepaid card issued by Island Pay in partnership with Mastercard (NYSE: MA). They can also use the card at any outlet in the Bahamas that accepts Mastercard and pay for their purchases by instantly converting their Sand Dollars to the traditional Bahamian dollars. The Sand Dollar and Bahamian Dollars are convertible on a 1:1 basis. (The Asian Banker)
This new card is the world’s first central bank digital currency (CBDC)-linked prepaid card.
Though it is currently only available in the Bahamas, it will soon be offered to tourists.
The Bahamas trashes cash
The Bahamas comprise 700 small islands strewn across more than 5,000 square miles of water. Its central bank has long suffered the logistics of making the Bahamian currency available across the country. Apart from the security issues, it is also a very expensive operation.
It ultimately had to make the transition to a digital currency. The Central Bank of The Bahamas, therefore, issued its own digital currency, the Sand Dollar. When launched in October 2020, it became the first fully-deployed digital version of a country’s fiat currency.
The Sand Dollar has the same value and consumer protection as a traditional Bahamian dollar.
Island Pay, Mastercard and Sand Dollar a Valuable CBDC test case
“Island Pay’s technology platform, combined with Mastercard technology and wide merchant acceptance, has the potential to help reduce the operational distribution costs of cash and modernize the overall payments system in The Bahamas,” Mastercard said in a statement.
“We welcome this approach to combining digital currency use with access to foreign currency and other payment outlets,” said Central Bank of The Bahamas Governor, John Rolle. “The Central Bank of The Bahamas will continue to encourage fintech developments that tie into the Sand Dollar infrastructure. This will allow us to satisfy best global practices for the regulation of the space.”
“The Bahamas is leading innovation in CBDCs. We’re thrilled to be able to play an important role in helping to democratize access to currency, especially in areas that are currently underserved,” said Richard Douglas, co-founder of Island Pay.
The Bahamian CBDC is an example that will be closely watched by countries across the world that may be similarly considering converting their physical fiat currencies to a digital avatar.
Related Story: Mastercard Creates Platform For Simulating a CBDC Ecosystem
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