Mastercard and Island Pay have partnered to give users an additional option to use The Bahamian Sand Dollar — the world’s first central bank digital currency (CBDC).
Held together by the Central Bank of The Bahamas, the prepaid card will enable people to instantly convert the digital currency to traditional Bahamian dollars and pay for goods and services anywhere Mastercard is accepted on the islands and around the world.
Originally piloted in 2019, the Sand Dollar became the first fully deployed digital version of a country’s fiat currency in October 2020. At that time, the Sand Dollar was exclusively accessed by registered users through a digital app provided by local payment service provider Island Pay at select merchants.
There are 700 small islands in The Bahamas, covering more than 5,000 square miles of water.
It has become costly to move cash, which makes a CBDC a preferred digital payment in the region.
“We welcome this approach to combining digital currency use with access to foreign currency and other payment outlets. The Central Bank of The Bahamas will continue to encourage fintech developments that tie into the Sand Dollar infrastructure, while allowing us to satisfy best global practices for regulation of the space,” said John Rolle, governor of the Central Bank of The Bahamas.
Furthermore, executive vice-president at Mastercard Raj Dhamodharan praised the project’s results, and indicated that this initiative represented just the tip of the iceberg, as 2021 has already seen Mastercard and other industry leaders like Visa partner with innovative fintechs to chart new paths in digital payments, including Paymentology, CleverCards, and Joompay.
“This partnership is an example of how the private and public sector can rethink what’s possible, while delivering the strongest levels of consumer protection and regulatory compliance. We’re creating a lot more possibilities for governments, shoppers, and merchants, allowing them to transact in an entirely new form of payment,” he said.
In the future, the Sand Dollar will be offered to tourists.