The Central Bank of the Bahamas officially launched the “Sand Dollar” – a virtual currency backed by the full faith of the Bahama government. This marks a historical moment in monetary history, with the Bahama Central Bank becoming the first to roll out a Central Bank Digital Currency (“CBDC”).
The Central Bank of the Bahamas used social media to distribute the news to 836 (lol) followers on Twitter:
— Central Bank Bahamas (@CentralbankBS1) October 20, 2020
The Central Bank of the Bahamas even launched a website for their new CBDC, which looks like it is still in development mode. The website states in the facts and questions area that the entire population of the Bahamas, 393,000, will be able to use the Sand Dollar at any merchant within the Bahamas.
But before you get your hopes up on a new “digital currency” that you can degenerate day trade, understand the following. The Sand Dollar is pegged to the Bahamian dollar, which is pegged to the U.S. Dollar. So if you are looking for a great inflation hedge, try something a little more rudimentary. Like gold. Or any other real asset.
Despite not trading a hot new digital currency that has potential to be the next bitcoin, this may help the struggling island nations. The goal of the Sand Dollar is to bring the island nation together in a financial web. With the end goal resulting in more access to digital payment structures for the unbanked residents.
Just remember, this new CBDC is backed by the Bahamian fiat, which is backed by the U.S. fiat. The only thing backing the U.S. fiat is the full faith in the monetary system. But with the massive expansion in Federal debt, the system is like a fat woman riding a bicycle. Everything is Kosher right now, but when things start to slow down, watch out where she falls.