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How Blockchain Helps to Renovate Financial System - Bahamas Case Study

The financial markets are being overrun by dozens of cryptocurrencies, which has prompted central banks all over the world to create their own digital coins. According to a new PwC report, The Bahamas' Sand Dollar is leading the way in this booming new industry. The Sand Dollar is a digital iteration of the Bahamian Dollar - and one of just two fully operational retail CBDCs worldwide. It was issued by the Central Bank of The Bahamas in October 2020. The currency holds identical legal status as the standard currency and can be used for a variety of transactions.

With an intent to renovate and smooth out the financial framework, diminish service conveyance costs, and boost the efficiency of transactions in the country, the Central Bank has remained ahead of the global curve since piloting the Sand Dollar in late 2019.

The goals of digital currency are very clear:

  • to increase payment speed, efficiency, and security;

  • to lower the cost of financial services and increase inclusion for all people, regardless of age or status;

  • and to tighten up control over money laundering, forgery, and other cash-enabled fraud.

"It also gives an excellent record of income and spending, which may be utilized as supporting documentation for micro-loan applications," the official currency website states.

Many ask why a small country like the Bahamas was able to beat economic giants in this race. It is important to highlight the island jurisdiction's commitment to innovation. The new Bahamas Digital Assets and Registered Exchanges (DARE) Act is considered a "monumental" piece of legislation as it strikes a fine balance between innovation and a robust regulatory framework. As Elsworth Johnson, Minister of Financial Services, Trade & Industry and Immigration, explains Bahamas is pursuing an aggressive public sector digitization initiative.

As we can see, adequate government policy and smart regulation is all that is necessary for a technology to flourish. This is the difference between digital policy in the Caribbean country versus most Western governments at the moment - they are at the avant-garde of the industry because of laws that promote innovation, safe application & governance of blockchain-based assets.

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