The Bahamas’ central bank has indicated its intention to force all local banks to accept the country’s digital currency as its popularity slides.
The Central Bank of The Bahamas plans to mandate all local banks to adopt the country’s central bank digital currency (CBDC) by 2026, Reuters has learned, citing the central bank’s governor John Rolle.
Launched in 2020 to expand banking access, the so-called “Sand Dollar” will soon get a significant boost from the central bank’s initiative as “all the local banks [will need] to provide their clients with access to the central bank digital currency,” Rolle said.
While the exact reasons for the accelerated CBDC integration are unclear, the Bahamas’ CBDC currently accounts for “less than 1% of currency in circulation in the Bahamas,” with wallet top-ups plummeting by 75% from $49.8 million to $12 million in August 2023, according to Reuters.
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The Bahamas isn’t alone in facing challenges related to CBDC adoption. Nigeria and Jamaica also report minimal usage of their digital currencies, Reuters says. Similarly, India’s digital currency, the e-rupee, has also seen a sharp decline in activity after local banks stopped artificially inflating its metrics.
As crypto.news reported earlier, the Reserve Bank of India achieved a milestone of 1 million retail transactions last December only after local banks provided “incentives […] to retail users and the disbursement of a portion of bank employees’ salaries using the e-rupee,” one of sources close to the matter said. However, once these incentives were withdrawn, daily transaction numbers “declined to about 100,000,” indicating an “evident lack of organic demand,” one the sources added.
Commenting on the India’s case, Rolle said the Bahamas is unlikely to provide any financial incentives to use its CBDC.
Read more: Germany’s central bank says Eurosystem won’t be able to ‘identify people’ based on CBDC payments
