Central bank-backed digital currencies gather momentum in The Bahamas and Sweden

A week after Canada’s central bank confirmed that its plans for a central bank-backed digital currency (CBDC) have accelerated during the pandemic, government-backed digital currencies cleared hurdles in two other markets.

Why should we care?
The shift toward digital payments during the pandemic has renewed interest among central banks and regulators on CBDC prospects and possibilities for implementation, including in the U.S. This week, payments firm Island Pay partnered with Mastercard to roll out a CBDC-linked payment card that allows users to instantly convert CBDC to traditional Bahamian dollars and pay for goods and services wherever Mastercard is accepted. The digital Sand Dollar, as the currency is called, carries the same value and consumer protections as the traditional Bahamian dollar. In the future, the digital Sand Dollar will be offered to tourists. “We’re thrilled to be able to play an important role in helping to democratize access to currency, especially in areas that are currently underserved,” said Richard Douglas, co-founder of Island Pay. Meanwhile, Sweden announced that it is extending its CBDC pilot project it began last year in collaboration with Accenture. The Swedish government has not yet decided whether it will issue a digital currency in the future.