The International Monetary Fund (IMF) warned in a review published Monday that the Bahamas’ central bank digital currency (CBDC), known as the sand dollar, requires broader reach and security to meet its goals. The IMF stated in an assessment of the Caribbean nation’s economic and financial policy that the sand dollar accounts for only 0.1 percent of the total money in circulation.
The IMF advised the country’s central bank to maintain building internal capacity – including on cybersecurity and the reliability of systems related to the sand dollar, noting that the sand dollar has limited avenues to usage.
In reaction to the findings, Bahamas authorities aim to enhance public awareness campaigns about the CBDC, according to Philip Jennings, the IMF executive director responsible for that country.
The Bahamas, along with Nigeria and China, has been a leader in lobbying for a CBDC, seeing it as a viable means of reaching people on the archipelago’s hundreds of remote islands. Citizens can now use it to pay their taxes, according to the country.
The IMF has been cautious of the use of private crypto in countries like El Salvador and Argentina, maybe because it sees bitcoin (BTC) as a danger to its own power. It’s warming up to government-controlled cryptocurrencies like CBDCs.
9 out of 10 banks to establish their own CBDCs
According to a recent poll conducted by the Bank for International Settlements, nine out of ten central banks are considering establishing their own CBDCs.
The results of a survey of 81 central banks performed in autumn 2021 were presented in a report issued on Friday by BIS, an umbrella body for central banks. The poll looked into banks’ involvement in their digital currency activities, as well as their motivations and goals for CBDC issuance. BIS is owned by 63 central banks representing approximately 95% of global GDP.
Furthermore, around 70% of central banks are exploring the effects of stablecoins on monetary and financial stability, while a quarter are investigating the use of cryptocurrencies.