China Is Missing The Boat
It is said that smaller countries have the advantage of being more flexible, more open to change and can adopt new regulations easily. The decision to implement The Bahamas Digital Currency has been made based on necessity. There are around 700 islands in The Bahamas and moving cash can be not only difficult but expensive too.
China is in the news every day with its plan to roll out the digital yuan. There's no day without it. The country is forced to speed up the process that was dormant till one year ago but they can't afford to postpone it anymore. It is possible they wanted to be the first to implement the digital currency, but it's too late for that, they have missed the train as The Bahamas is already ahead of them.
Today, Bahamians have gained even greater versatility in how they shop and pay using the first of its kind, the country’s digital currency. The Bahamas Sand Dollar prepaid card gives people the opportunity to instantly convert the digital currency to traditional Bahamian dollars under a new initiative from Mastercard and Island Pay and pay for products and services anywhere Mastercard is accepted on the Islands and around the world. source
Teaming up with Mastercard and Island Pay has helped them make the digital currency available on prepaid cards.
All authorised wallet providers will offer interoperable Sand Dollar services. This means that both enrolled businesses and individuals would be able to send and receive funds with any other digital wallet once the transaction is in Sand Dollars. However, some payment providers have adopted a two-phased approach to product development. This would make the Sand Dollar available within their own networks before such networks are fully interoperable with third-party wallets. Cross-platform interoperability should also be achieved for such providers during the early months of 2021. source
There's a cybersecurity assessment process for companies to be cleared to distribute Sand Dollars within their proprietary mobile wallets. There are around nine of them already that has completed the process among which one credit union and one commercial bank.
Looks like they are all set, ready to open the gates for tourists in case the pandemic is gone and travel bans are lifted. Digital currency use is now combined with access to foreign currency and other payment outlets.
While In China
According to local media outlet Xinhua News on Tuesday (FeB., 16, 2021), PSBC is trialing a biometric card which Chinese residents can use for digital yuan payments. The card comes with a biometric sensor which helps to verify the user’s identity via fingerprint and also authenticate payments both online and offline. source
One of the reasons why the use of CBDC can be a problem in some countries is the elderly. Those countries working on testing CBDC must have a plan to tackle the issue. Maybe China's biometric card solution will be adopted by other as well.
The People’s Bank of China and the Hong Kong Monetary Authority are looking into trialing the digital yuan for cross-border transactions. This is an important piece of the puzzle as the main reason why China is rushing the project is the fear of being excluded by SWIFT due to international sanctions.
Trials have already started in different Chinese regions and the DC/EP will also be introduced at Macau casinos. Imagine how happy those casino operators were when they found out about what is prepared for them and they have no saying in the matter. This can chase clients away as no one wants people to know how much the won or lost.
I'm curious to see what's going to happen with the two existing mobile payment platforms, Alipay and WeCaht. These two payment giants control 90% of China’s digital payment market. This can be seen as a threat by the government. The DC/EP will be fee-less, which can make a difference. It would be great to see a natural process but who knows what the Chinese government plans. I guess time will tell.
Central Bank Digital Currencies Evolution Map
The above map was published on the 1st February, 2021. The difference in evolution between countries is huge.
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