The Central Bank of the Bahamas has finalized the debut date of its digital currency. This is likely the world’s first central bank digital currency (CBDC). The island nation has rallied ahead of finance giants like France and China.
Less than a month away, the first Central Bank Digital Currency is nearly a reality. The Bahamas have finalized the start of phase one of their new CBDC.
Last Month, BeInCrypto reported the island nation’s plan to launch the world’s first CBDC. Other countries, such as France and China, were also vying for the honor. On Sept. 25, ConsenSys announced that it is working with Hong Kong on a CBDC proof-of-concept.
While Oct. 20 would make the currency the world’s first, it is not bursting onto the scene all at once. The so-called “Sand Dollar” will be released in phases, beginning with access to private institutions such as banks. During phase one, these organizations will have to ready their operations and set up know-your-customer (KYC) compliance.
Wallets opened in private institutions during this phase will have tiered degrees of KYC and restrictions.
The second phase, planned for early 2021, will involve public organizations like utility companies and services.
Authorized Financial Institutions (AFIs) and other financial companies will need to demonstrate a degree of cybersecurity as well. Wallets will have multi-factor authentication.
Though the transactions will not have the anonymity of cash, they will not be without protections. The announcement notes that there will be standards to protect identifying information, including encryption. (which makes the Sand Dollar a cryptocurrency in one of the loosest senses of the word).
No Man Is an Island
The central bank has said it is no accident that The Bahamas is the first nation to have a CBDC. BeInCrypto previously reported that the bank was driven by the need to deal with a large volume of microtransactions.
With many small entrepreneurs scattered over multiple small islands, an easy way to pay anywhere was desirable. In fact, the Payment System Modernization Initiative has been around since the early 2000s. Perhaps the country is first to produce a CBDC because they started first as well.