The Bahamas Edges Closer to Hurricane-Proof Digital Currency
The Bahamas is betting its mobile phone-based digital currency could be the key to faster post-disaster economic recovery.
Jul 15, 2020 at 7:09 p.m. UTCUpdated Aug 19, 2021 at 3:08 a.m. UTC
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The Bahamas’ central bank said it is “progressing” toward the full launch of a mobile phone-based digital currency (CBDC) it’s betting can withstand the battering of a Category 5 hurricane.
- Last September, the Bahamas struggled to rebound from Hurricane Dorian’s $3.4 billion devastation, in part because the storm, the largest in Bahamian history, had decimated the islands’ physical banking and payments systems.
- Some Bahamian banks and ATMs remained offline for months, the central bank said in its Sunday report. “Mobile phone coverage, by contrast, was generally restored within a few days after Dorian,” it said.
- The central bank believes it can fast-track future recoveries by building CBDC functionality into mobile phones. It projected this could help ease critical post-disaster recovery tools such as receiving insurance claims.
- “The Dorian aftermath demonstrated one major benefit: rapid payments system restoration after a disaster,” the central bank said.
- It also noted a mobile phone CBDC can eliminate some pandemic-era pain points, such as queueing at a bank and physically exchanging currency.
- The central bank’s CBDC effort, known as Project Sand Dollar, is currently in the testing phase on the island of Abaco.
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