The first Central Bank Digital Currency

Bahamas has announced the first digital currency (as of October 20, 2020). Bahamian dollars are set at parity with the USD, but as of right now the digital currency can only be used in the Bahamas. The Bahamas central bank issues $452 billion in Bahamian banknotes for their population of 393 thousand (or $1150 per capita).

As I understand it the digital currency is not the kind where you have an account. It is independent currency using a blockchain that only exists on your phone. I do not know if there is a backup that protects you if your phone is broken or stolen.

In 1966, the government introduced notes in denominations of ½, 1, 3, 5, 10, 20, 50 and 100 dollars. Coins were introduced in denominations of 1, 5, 10, 15, 25, 50 cents, 1 and 2 dollars. The 15 cent coin and the $3 bill ($3/0.15=20) were similar in value to the British pound and shilling for people who were used to the British system at the time. Today they are seldom used.

I wonder if you could have more than one key. If not it is a clear path to government controlling the people.

OTOH, it will lower transaction fees for debit purchases. As long as it is optional I think it is a good experiment.

Now if only they would back it with bitcoin I might retire!

Quote: AZDuffman

Now if only they would back it with bitcoin I might retire!

Foreign Exchange Reserves in Bahamas hit an all time high of $2,127 million in August of 2020. That would seem to be more than enough to back it's paper currency which is only $452 million. But I don't know what, if anything, will back the CBDC issue.

http://www.tribune242.com/news/2020/aug/05/foreign-reserves-enjoy-200m-restriction-boost/

Sweden projects that it's CBDC will probably never total more than it's current banknote stock in circulation (currently $6.2 billion). Sweden is issuing roughly $620 per person in banknotes, while Bahamas is double that ($1150 per person).

But China seems more intent on it's digital currency being used around the world (possibly trillions of dollars worth).

Bitcoin market capitalization is currently $300 billion. There is $163 billion in other crypto currencies.

The crypto currency that is ranked a distant third place is "Tether" which is set at parity with the USD and has a market cap of $17.7 billion. The Bahamian Sand Dollar could theoretically compete with Tether, as it is also set at parity with the USD, but is backed by a central bank.