Professional services firm PricewaterhouseCoopers (PwC) has given The Bahamas’ Sand Dollar the highest ranking in a report rating central bank digital currencies (CBDC).

The launch of the pilot phase in December 2019 marked the start of the Sand Dollar project by the Central Bank of The Bahamas. It was officially launched in October 2020, issued through authorised financial institutions.

The central bank announced last month that it expects to imminently complete the technical integration of the Sand Dollar’s digital infrastructure with the commercial banking system.

Nine payment service providers have been authorised to distribute Sand Dollars in The Bahamas.

PwC’s Global CBDC Index 2021 examined interbank and retail CBDC projects. It indicated that this is form of currency that can be directly held by citizens and corporates as a digital form of cash as a complement to paper money.

Cambodia’s Project Bakong ranked second while China’s digital Yuan, which is still being trialled, was ranked third.

PwC noted that more than 60 central banks have been exploring CBDCs since 2014, with progress accelerating as some CBDC projects are now entering implementation phases.

“Retail CBDC projects appear to be more advanced in emerging economies with financial inclusion stated as an expected outcome. Wholesale efforts are mostly conducted in more advanced economies with more developed interbank systems and capital markets,” the report stated.

According to PwC, just about 70 per cent of declared wholesale projects are currently running pilot programmes with the majority of them (88 per cent) using block-chain technology.

“We believe CBDCs will contribute significantly to the modernisation of the international monetary landscape, hand-in-hand with reconfiguration in both payment and financial infrastructure. They will generate numerous opportunities for further digitisation in both corporate and financial institutions, as their integration in payment and financial infrastructure progresses,” PwC stated in the report.