Mastercard Tapped to Issue Prepaid Cards Linked to Bahamas’ Central Bank Digital Currency
Mastercard has partnered with the Central Bank of The Bahamas and Island Pay to issue prepaid cards that would allow people of Bahamas to instantly convert the Bahamas’ CBDC to cash during purchases.
The Central Bank of The Bahamas, Island Pay local mobile payment service provider, and Mastercard have partnered to give the people of Bahamas greater flexibility when transacting with the Sand Dollar - Bahamas' central bank digital currency.
The new program is designed to enable citizens to instantly convert the central bank digital currency into cash (traditional Bahamian dollars). They can even pay for goods and services anywhere, as Mastercard prepaid cards are accepted on the Islands and across the globe. Mastercard technology, combined with Island Pay’s digital platform and wide merchant acceptance, has the potential to assist in modernizing the overall payment systems and reducing the operational distribution cost of cash in the country.
John Rolle, the Governor of the Central Bank of the Bahamas, said:
“We welcome this approach to combining digital currency use with access to foreign currency and other payment outlets. The Central Bank of The Bahamas will continue to encourage fintech developments that tie into the Sand Dollar infrastructure while allowing us to satisfy the best global practices for regulation of the space.”
This CBDC initiative is in line with Mastercard’s program, as the payments giant aims to work with central banks. Last September, Mastercard created a virtual testing program that allowed central banks to test the use-cases of their CBDCs.
Raj Dhamodharan, EVP of Digital Asset & Blockchain Products & Partnerships at Mastercard, said: “This partnership is an example of how the private and public sector can rethink what’s possible while delivering the strongest levels of consumer protection and regulatory compliance. We’re creating a lot more possibilities for governments, shoppers and merchants, allowing them to transact in an entirely new form of payment.”
The Role of Mobile Phone-Based CBDC
Last October, Bahamas became the first country to launch Central Bank Digital Currency, a digital version of the traditional cash (Bahamian dollar). The Central Bank of The Bahamas made the sand dollar (the national digital currency) to be transferable via mobile phones, making the CBDC easy to use for the local citizens. The digital currency is usable even while offline, thus making it a good payment option for residents without an internet connection.
Bahamas’ central bank pinpointed the offline availability as a crucial feature when designing and developing the Sand Dollar. The feature is essential as the archipelagic State is prone to natural disasters. For example, when Hurricane Dorian hit the island in September 2019 and destroyed billions worth of property, most people's internet connection was obliterated.
Image source: Shutterstock
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