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Bahamas Working on a CBDC to Counter Natural Disasters

Saad Ullah

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Michael Jones pumps fuel into a customer’s car from a mobile tank he had especially shipped to Bahamas after Hurricane Dorian hit the island. “Those pumps are destroyed,” he points to his gas station, the wind and salty water has completely wiped off his establishment. Even weeks after the strongest hurricane in the history of Bahamas moved on, most parts of the island are still without electricity and power. This means no banking system working and therefore, no commerce.

No Power, No Money

Dorian had hit Bahamas as a category 5 hurricane, bashing the island with a fury never seen. Winds of more than 350 kilometers per hour lashed out, blowing everything away. A 6 meter wall of sea water drowned most of the eastern side. The wind and water combination had completely destroyed the infrastructure. Many parts of the Bahamas are still struggling with getting power online. With banks and the financial system shutdown, people cannot withdraw money. No ATMs, no power to computers to retrieve records and use checks.

There is zero commerce,” a local businessman commented. “There’s nothing. You can’t buy water. You can have as much money as you want, you can’t buy anything here.”

Project Sand Dollar

As the island battles with the aftermath of hurricane Dorian, The Central Bank of Bahamas (CBOB) is working towards releasing its own digital currency. According to a local publication, the central bank has decided to have a digital equivalent that will not be dependent on physical cash, something crucial that can help commerce and economy stay alive during a natural disaster such as Dorian. This is the part of the Project Sand Dollar, with a digital wallet in which the currency will be stored. It will also be accompanied by a physical card that will store a copy of the wallet data.

Speaking to the Councellors Limited’s Exuma Business Outlook in Sandals Emerald Bay, the Governor of CBOB, John Rolle spoke of the benefit the digital currency,

“It would permit wireless restoration of payments connectivity, avoiding the cash shipment and cash handling frustrations. It would permit electronic dispersing of aid and allow families to recapture personal dignity by restoring the flexibility to prioritize the elements of personal need that they prefer to satisfy post-disasters.”

If the digital currency is successful, the power of decentralization would mean that even in event of another disaster, records in other parts of the country would still be online and people will be able to use their digital or physical wallets to access funds and bring some sort of normalcy in life.

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