Home Digital Currencies Bahamas pushes CBDC take-up via digital wallet ‘facelift’ and cash giveaways

Bahamas pushes CBDC take-up via digital wallet ‘facelift’ and cash giveaways

Sand Dollar: freezeframes from from the @sanddollar_BS Twitter account, which airs short videos of Sand Dollar promotional activity | Global Government Fintech montage

A digital wallet ‘facelift’ and cash giveaways are among the initiatives being undertaken by the Central Bank of the Bahamas to drive take-up of one of the world’s few live central bank digital currencies (CBDCs).

The Central Bank of the Bahamas (CBB) launched the Sand Dollar almost three years ago. Despite the archipelago nation’s small size – its total population is about 400,000 people – its status as a CBDC pioneer means its experience is being closely followed digital currency developers and policymakers worldwide.

In a ‘Public Update on The Bahamas Digital Currency – Sand Dollar’, the central bank sets out a swathe of initiatives to encourage people and businesses to start or continue using the Sand Dollar – which is valued 1-to-1 with the Bahamian dollar, which is itself pegged to the US dollar – to make payments.

The central bank’s update includes a ‘general statistics’ table that reveals that the volume of Sand Dollars in circulation is $1,093,373.71 (about £833,000). This is a small increase from the amount in circulation at the end of 2022, which was $1,052,459 (according to the CBB’s 2022 annual report, published in May 2023). The end-2022 amount was more than three times the figure one year previously ($0.304 million at end-2021).

The number of consumer digital wallets downloaded to pay with or receive Sand Dollars stands at 106,147, according to the table (which Global Government Fintech reproduces below).

Sand Dollar in numbers (June 2023)
Sand Dollars in circulation$1,093,373.71
Number of approved digital wallet providers9
Active digital wallet providers7
Number of consumer wallets106,147
Number of merchant wallets1,608
Source: ‘Public Update on The Bahamas Digital Currency – Sand Dollar’, CBB, 7 July 2023

Improving ‘user experience’

The update describes the CBB’s original Sand Dollar mobile wallet as ‘undergoing a facelift’.

‘The smoother interface will include new features and promote a more pleasant user experience,’ it explains. ‘The enhanced mobile app will provide a number of self-service tools, ranging from self-onboarding to secure wallet recovery. An optional memo field has been added, which allows additional transaction details – aiding reconciliation [ensuring that two sets of records are in agreement].’

The updated Sand Dollar app will feature a list of frequent contacts with whom wallet holders regularly transact, the update also states, adding that the central bank ‘anticipates a public release in September 2023’.

The CBB is not the only central bank updating its CBDC app. A senior representative from the People’s Bank of China (PBoC)’s Digital Currency Institute said in March that the app for China’s digital currency, the e-CNY, had been ‘iterated’ over 19 versions since last year “to satisfy market needs”.

In a separate development in the Bahamas, Sand Dollar digital wallet-holders are also now able to top-up their wallets from commercial bank accounts via online banking domestic transfers. This feature is available for all Sand Dollar-enabled digital wallets, so therefore includes seven different ‘merchant wallets’ (from Cash ‘N Go, Island Pay, Kanoo, MobileAssist, MoneyMaxx, OMNI Financial Services and SunCash Bahamas), as well as the central bank’s original Sand Dollar app.

RELATED ARTICLE All or nothing? Central bank digital currencies’ financial inclusion challenge – write-up of a webinar (held on 7 February 2023) asking ‘Can central bank digital currencies help tackle poverty?’ that featured panellists from the Bahamas (the CBB’s Kimwood Mott), Eastern Caribbean and Canada

Appealing to shoppers

In terms of giveaways and promotional activity, activities in New Providence – the Bahamas’ most populous island and location of capital city Nassau – have included what is described as a ‘rebate program’ in selected supermarkets.

On pre-announced dates, the first 100 customers presenting an activated Sand Dollar-enabled digital wallet were eligible to receive a $20 (about £15) wallet ‘top-up’. Shoppers spending $18 or more Sand Dollars in-store received an additional $5 top-up (rebate) upon their exit.

The top-up campaign will run until 30 July, with a ‘more comprehensive rebate campaign’ being finalised for an August rollout.

‘The public can look forward to similar rebate opportunities with popular Sand Dollar merchants throughout the year, as the Central Bank continues to focus on expanding the number of large merchants and organisations that accept Sand Dollar as a payment method,’ the CBB states.

In a separate PR initiative, a squad of Sand Dollar ‘ambassadors’ has been engaged in New Providence. The ambassadors will offer merchants and consumers ‘on-demand assistance with the use of Sand Dollar through various platforms’. They are being trained up before ‘initial deployment’ in late-July. Ambassador recruits for Grand Bahama and the Family Islands are expected to be identified and deployed shortly after. The Bahamas spans 700 islands in total, with the vast majority being uninhabited.

A tweet on 13 July highlighting Sand Dollar promotion in a chain of supermarkets

Radio giveaways and event promotions

Sand Dollar giveaways took place on news/talk radio station Guardian Radio throughout June. Every weekday listeners answered trivia questions for a chance to win two $30 giveaways.

Sand Dollar team members met government officials, business owners and community representatives in North and Central Andros in mid-June, both virtually and in person, with the CBB presenting at a business conference (‘Andros Business Outlook’) on 15 June.

The Sand Dollar featured as a payment method at events including the Long Island Regatta (31 May-3 June) and All Andros Crab Fest (23-25 June 2023). SunCash Bahamas was the ‘digital wallet provider’ for these events.

Similarly, Cash ‘N Go was picked by the Bahamas Games Organising Committee to facilitate Sand Dollar wallet services as one of the payment methods accepted at the 7-15 July event in Nassau.

The central bank’s update states that ‘outreach activities’ are set to continue throughout the year. Representatives from the CBB and various digital wallet providers are set to visit to Eleuthera, Grand Bahama and also Bimini – the Bahamas’ closest point to the mainland United States – to deliver ‘in-person education and awareness opportunities’.

A tweet in June from the @sanddollar_BS account illustrating promotional activity focused on business use of the CBDC

RELATED ARTICLE Bahamas central bank shares CBDC lessons from Sand Dollar’s first two years – an article (9 November 2022) based on a (virtual) speech made by governor John Rolle

Learning lessons

The CBB’s governor last November highlighted a quartet of lessons learned about CBDC issuance as the Sand Dollar’s circulation remained ‘less than one per cent’ of currency issued.

In a speech via video-link to a conference in Brussels, John Rolle described four factors that the Bahamas’ experience suggests are particularly important – and that, he said, remain important to its own efforts to encourage CBDC adoption. Those factors were: building a network of merchants that accept and encourage CBDC use; achieving interoperability with the traditional banking system; enlisting participation from the traditional banking sector and credit unions; and the importance of “user education” and “inspiring user confidence”.

At the time he described efforts to encourage adoption of the Sand Dollar as being ‘still in the very early stages’.

In terms of expanding the number of merchants accepting the CBDC, Rolle said that efforts were ‘beginning to accelerate through direct outreach to the business community, with education focused on the benefits of reducing physical cash in commerce.’ In terms of boosting awareness and trust in using Sand Dollars among the general population, Rolle said that ‘messaging [was] being crafted to inspire user confidence, especially around data protection, cyber security and ease-of-use’.

A tweet in May promoting a video of Bahamas prime minister Philip Davis buying goods using the Sand Dollar

The Bahamas launched the Sand Dollar in October 2020, with motivations including improving financial inclusion, benefits to the government from ‘improved expenditure and tax administration systems’ and achieving cost savings by reducing cash usage.

FURTHER READING

Global Government Fintech’s dedicated ‘Digital Currencies’ section

Bahamas ‘Sand Dollar’ CBDC put to use for payroll – our news story (22 October 2021) on two locally-based companies (mobile payments firm Island Pay and food-delivery company Bahama Eats) teaming up to claim the first use of a CBDC for payroll

CBDC-linked prepaid card debuts as Bahamas central bank consults on regulation – our news story (23 February 2021) on the launch of an Island Pay-Mastercard CBDC-linked prepaid card

Bahamas central bank readies “Sand Dollar” as sovereign digital currency – our news story (22 September 2020) ahead of the CBDC’s launch