After FTX blew up, the Bahama Sand Dollar couldn’t maintain its momentum.
Bahamian authorities have blamed the FTX implosion and the Covid-19 pandemic as contributing factors to the slow adoption rate of the Sand Dollar, the country’s central bank digital currency (CBDC) launched in 2020.
FTX collapse – a huge blow for Sand Dollar adoption
Earlier in Oct. 2020, the Bahamas put its name in the history books as one of the very first nations to officially launch its central bank digital currency (CBDC). However, nearly three years down the line, the blockchain-based Bahamian Sand Dollar is yet to gain significant traction among residents.
Despite being powered by distributed ledger technology (DLT), just like bitcoin (BTC) and other cryptocurrencies, the Sand Dollar is entirely different from regular crypto assets, as it is state-backed and pegged to the U.S. dollar.
According to Bloomberg, Kimwood Mott, the project manager at the Central Bank of the Bahamas, has blamed the slow adoption rate of the country’s CBDC on the lingering Covid-19, and the abrupt shutdown of the Bahamas-headquartered FTX exchange last year.
The Covid-19 pandemic totally crippled regular operations in the tourist nation for several months and made it impossible for the government to enlighten residents on the workings of the Sand Dollar.
Now, sources say a vast array of crypto-averse Bahamians view the Sand Dollar as crypto rather than simply a digital representation of the Bahamian dollar. The FTX implosion has worsened the adoption crisis.
“I am always telling people that this is not a cryptocurrency. But if people don’t know what a cryptocurrency or a CBDC is, then I’m just making a statement.”Kimwood Mott, Central Bank of the Bahamas.
In the same vein, Kendric Dames, a Nassau-based barber and Sand dollar enthusiast echoed the same sentiments, making it clear that “a lot of residents still think the CBDC is a crypto” and that’s discouraging them from using it.
Established by the disgraced Sam Bankman-Fried and Gary Wang in 2019, the now-defunct FTX exchange’s headquarters was moved from Hong Kong to the Bahamas in Sept. 2021 before the company filed for Chapter 11 bankruptcy last Nov.
While FTX co-founder, Gary Wang, and former Alameda CEO, Caroline Ellison has already pleaded guilty to criminal charges, Bankman-Fried has continued to deny any wrongdoing that may have led to the fall of the exchange, and his final trial is scheduled for Oct.2.