{"id":97913,"date":"2020-10-26T20:05:35","date_gmt":"2020-10-26T17:05:35","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bahamas-strikes-first-with-sand-dollar-amid-us-china-cbdc-faceoff\/"},"modified":"2020-10-26T20:05:35","modified_gmt":"2020-10-26T17:05:35","slug":"bahamas-strikes-first-with-sand-dollar-amid-us-china-cbdc-faceoff","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bahamas-strikes-first-with-sand-dollar-amid-us-china-cbdc-faceoff\/","title":{"rendered":"# Bahamas strikes first with Sand Dollar amid US\u2013China CBDC faceoff"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a374c7601d6d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a374c7601d6d\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/bahamas-strikes-first-with-sand-dollar-amid-us-china-cbdc-faceoff\/#A_sense_of_urgency\" >A sense of urgency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/bahamas-strikes-first-with-sand-dollar-amid-us-china-cbdc-faceoff\/#How_close_is_the_first_mass_CBDC\" >How close is the first mass CBDC?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Bahamas strikes first with Sand Dollar amid US\u2013China CBDC faceoff   <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjAtMTAvOGMzNWI3MWQtYWRmMy00MGNlLTllZDgtNWVkODY2ODIwZGViLmpwZw==.jpg\" \/><\/p>\n<div data-v-5a136f3a=\"\">The Bahamas, an island nation in the West Indies, made digital currency history on Oct. 20 with the official launch of a new central bank digital currency, the so-called Sand Dollar. It became the first country to roll out a CBDC available to all residents, and while the Bahamas is a small nation \u2014 with only 393,000 people \u2014 it <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears to be an event of some global financial significance.<\/p>\n<p>Or is it? \u201cIt could be if it succeeds,\u201d Ross Buckley, KPMG-KWM professor of disruptive innovation at University of New South Wales, Sydney, told Cointelegraph. \u201cOther small island nations \u2014 as in my backyard in the Pacific \u2014 are watching it carefully and could well follow suit.\u201d<\/p>\n<p>James Barth, a finance professor at Auburn University, placed the event in the context of a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of CBDC milestones, beginning with the launch of Bitcoin (BTC) in 2009 and including <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Facebook<\/a>\u2019s Libra announcement in 2019, China\u2019s CBDC trials in April, and the European Central Bank\u2019s statement about the possible issuance of a digital euro in October. \u201cThese developments and the COVID-19 pandemic made it virtually certain that a country \u2014 most likely a small country \u2014 would go live with a central bank digital currency,\u201d he said.<\/p>\n<p>Some, however, said it was too early to tell. Hans Gersbach, an economics professor at ETH Zurich in Switzerland, told Cointelegraph: \u201cFirst, we have to see whether it will function well in practice.\u201d Jay Joe, CEO of Nzia Limited \u2014 the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> solutions provider for the Bahamas rollout \u2014 told Cointelegraph that the Sand Dollar was introduced in the Bahamas to help facilitate financial inclusion across the nation:<\/p>\n<blockquote><p>\u201cThe Bahamas as a vast archipelago spreading across over 100,000 square miles of ocean, has many remote islands and communities where residents do not have access to formal financial services.\u201d<\/p><\/blockquote>\n<p>Because of population sparsity, it often isn\u2019t economically viable for banks to build branches and sustain infrastructure. The new CBDC \u201cenables the people of The Bahamas universal access to digital payments and extends the reach of financial services to all corners of the nation,\u201d Joe told Cointelegraph. Among the key questions the nation\u2019s central bank and others were looking to answer with the rollout, Joe said, were \u201chow existing regulations and policies will be shaped, and, eventually, how the CBDC will be embraced by the people to some day become as ubiquitous as cash.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_sense_of_urgency\"><\/span>A sense of urgency?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The global demand for online services has accelerated dramatically with the COVID-19 pandemic, and this is arguably driving the development of CBDCs around the world. As the deputy governor of the Central Bank of Canada, Timothy Lane, <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/ca.reuters.com\/article\/us-canada-cenbank-idCAKBN26Z2R0\">said<\/a> recently. \u201cIf we want to be ready to develop any kind of digital central bank product, we need to move faster than we thought was going to be necessary.\u201d Barth further explained:<\/p>\n<blockquote><p>\u201cThe virus has shifted behavior in favor of more social distancing and therefore greater use of online communication and transactions, both domestically and globally. This certainly makes digital currencies more relevant as money and for payments.\u201d<\/p><\/blockquote>\n<p>But this sense of urgency isn\u2019t universal, as Jerome Powell, chairman of the United States Federal Reserve, said on Oct. 19 at an International Monetary Fund event. He believes that CBDCs face many critical challenges, such as preventing fraud and cyber attacks, ensuring financial stability, and protecting privacy, saying: \u201cThere\u2019s a great deal of work yet to be done. [&#8230;] In fact, I actually do think that CBDC is one of those issues where it\u2019s more important for the United States to get it right than it is to be first.\u201d<\/p>\n<p>The U.S. needn\u2019t worry about losing the &#8220;first-mover&#8221; advantage with regard to a digital currency, Powell implied. Was he right? \u201cProbably in the immediate sense, yes,\u201d according to Buckley, who added: \u201cLonger term though if China or another nation allows its CBDC to be used in international trade, the U.S. will have to respond and quickly.\u201d<\/p>\n<p>The U.S. draws extraordinary benefits from minting the world\u2019s reserve currency, and the loss of exclusivity in that regard could cost the U.S. economy dearly. It would also have political consequences \u2014 for instance, placing many countries outside the scope of U.S. financial sanctions. Buckley believes that China\u2019s \u201clong <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>\u201d is, arguably, to upend the U.S. dollar as the world\u2019s reserve currency. \u201cIt [China] hates that the global economic system is built upon the U.S. dollar, and it aims to build a parallel system that it controls,\u201d he said, further adding: \u201cThis was the impetus behind the denomination of trade contracts of other country\u2019s exporters and importers with China in renminbi.\u201d<\/p>\n<p>It was also a motivation behind the New Development Bank established by the BRICS states \u2014 Brazil, Russia, India, China and South Africa \u2014 and also for the Asian Infrastructure Investment Bank, continued Buckley, referencing another multilateral development bank whose creation was proposed by China in 2009 to make better use of Chinese foreign currency reserves amid a global financial crisis. \u201cA [Chinese] CBDC will interact really well with dematerialized digital trade documentation so if China allows DC\/EP offshore it will be a total game changer. In time I think they will.\u201d<\/p>\n<p>Barth, for his part, agreed that the U.S. didn\u2019t have to hurry to bring a CBDC to market, as the U.S is the world\u2019s largest economy, accounting for 20% of global gross domestic product, and the U.S. dollar remains the world\u2019s dominant currency. \u201cChairman Powell is right that the U.S. does not have to worry about losing any \u2018first mover\u2019 advantage by rushing to issue a central bank digital currency.\u201d<\/p>\n<p>On the other hand, Sidharth Sogani, founder and CEO of analytics firm Crebaco Global, told Cointelegraph that being first to market among large economies does<em> <\/em>matter. &#8220;China is already testing its CBDC. They have integrated POS machines, mobile apps and many other source codes to develop apps on their CBDC.\u201d<\/p>\n<p>He further opined: \u201cFirst mover advantage is crucial in this case \u2014 especially when you are competing with China.\u201d Financially, the U.S. is still dominant, but with regard to CBDC technology, it trails \u2014 \u201cAnd here China is going to lead for sure as they are ready with their CBDC and are the second biggest economy globally.\u201d<\/p>\n<p>Sogani explained this from the point of view of a bank customer: \u201cIf you are already having a great experience with Bank A,\u201d which uses a Chinese CBDC, \u201cwill you open an account or download an app with Bank B \u2014 which does business with a U.S. dollar CBDC?\u201d If\/when China launches its CBDC, it will attract large numbers of global customers very quickly. \u201cIt will be difficult to catch them.\u201d<\/p>\n<p>The U.S. should have a CBDC ready to go \u2014 just in case \u2014 suggested Gersbach. \u201cPreparation should be stepped up in order to follow fast if successful models of CBCDs are introduced.\u201d But according to Barth, the big question is how the \u201cCBDCs will affect money and payments, particularly the role of the government.\u201d Gersbach also outlined several other factors: \u201cPreventing cyber attacks, privacy issues, and financial stability. Security of all kinds and financial stability are the two most important issues to be resolved.\u201d<\/p>\n<p>Sogani, assuming that CBDCs would be built on a blockchain platform, questioned how CBDCs would relate to Bitcoin and other cryptocurrencies. \u201cIt\u2019s [a CBDC] a completely different thing, with different fundamentals and uses. Understanding the nitty gritty is the biggest challenge.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_close_is_the_first_mass_CBDC\"><\/span>How close is the first mass CBDC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>It seems that the development of CBDCs around the world has picked up in 2020, and if this is the case, when might one see the first massive-scale CBDC? According to Barth: \u201cMost of the major countries have been studying CBDCs for some time now.\u201d He added:<\/p>\n<blockquote><p>\u201cChina, of course, has been engaged in trials but with no information provided about a nationwide adoption date. Nevertheless, it is likely to be the first major country to issue a CBDC, and if so, it is likely to trigger other major countries to follow suit.\u201d<\/p><\/blockquote>\n<p>Regarding China, Sogani said: \u201cTheir legal framework seems to be in the making. It will launch it for the masses in a few months. I don\u2019t see any other country as close to China\u2019s development stage.&#8221; Meanwhile, according to Buckley: \u201cChina intends clearly its digital currency\/electronic payment project to dominate payments and money within China domestically, and they\u2019ve been working on it for five to seven years.\u201d<\/p>\n<p>As long as the project remains domestic, there is no real challenge to the United States. But if China takes it global, \u201cIt will take the U.S. years of work to respond with a CBDC of its own, the so-called digital dollar,\u201d said Buckley.<\/p>\n<p>Meanwhile, Sogani sees big benefits, even for small countries \u2014 like the Bahamas \u2014 that take the digital path. &#8220;A CBDC enables a country\u2019s currency to go global which the current financial ecosystem doesn\u2019t offer.\u201d To make an international transfer, ample paperwork needs to be signed and fees paid. \u201cThis is expensive. It takes up to two days and is complicated,\u201d commented Sogani, adding:<\/p>\n<blockquote><p>\u201cBut if it is a CBDC, it can go directly to the mobile apps, and it can be tracked. Yes, there will be compliance but the SWIFT method, which involves nostro and vostro accounts, will be eliminated \u2014 making life simpler.\u201d<\/p><\/blockquote>\n<p>Joe called the Bahamas\u2019 rollout \u201cthe world\u2019s first production-grade live implementation of a retail CBDC.\u201d Asked if there were lessons here for other nations, the NZIA CEO told Cointelegraph that there were many, \u201cincluding the importance of grassroots engagement and understanding of CBDC and its effects on the intermediated financial system,\u201d further adding:<\/p>\n<blockquote><p>\u201cA CBDC is more than elaborate software and mobile wallet systems. It needs to be designed from the ground up and built as part of a national payments infrastructure that addresses the needs of everyday people.\u201d<\/p><\/blockquote>\n<p>In sum, there appears to be a certain global logic to recent events. Because the U.S. dollar, the incumbent global currency reserve, has much to lose by coming to market with a flawed CBDC, it appears to be moving cautiously, content to let smaller players such as the Bahamas do its beta testing. Meanwhile, China, the challenger, is moving fast, but its DC\/EP project is focused on the nation\u2019s mass market for now. A truly global digital yuan may still be some years away.<\/p>\n<p>\u201cA CBDC is a total game changer that raises a host of tough issues,\u201d concluded Buckley. \u201cThis is why no one country has yet done it. Central banks never like stepping into the unknown \u2014 it\u2019s not in their DNA for good reasons. But I think China will force other nations\u2019 hands.\u201d<\/p>\n<\/div>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener noreferrer\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/bahamas-strikes-first-with-sand-dollar-amid-us-china-cbdc-faceoff\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Bahamas strikes first with Sand Dollar amid US\u2013China CBDC faceoff &#8221; The Bahamas, an island nation in the West Indies, made digital currency history on Oct. 20 with the official launch of a new central bank digital currency, the so-called Sand Dollar. It became the first country to roll out a CBDC available to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":97914,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2020-10\/8c35b71d-adf3-40ce-9ed8-5ed866820deb.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,75046,75159,76153,4973,70934,67874],"class_list":["post-97913","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-cbdc","tag-digital-currency","tag-dollar","tag-china","tag-regulation","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/97913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=97913"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/97913\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/97914"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=97913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=97913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=97913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}