The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Royal Bank of Canada’s (RBC) Caribbean chief yesterday pledged it would participate in the roll-out of the digital Bahamian dollar, adding that it was “very curious to see how it’s going to unfold”.

Robert Johnson, RBC’s head of Caribbean banking, told Tribune Business that “we are going to be one of the participating financial institutions” in the extension of Project Sand Dollar throughout The Bahamas.

“We think it’s an interesting approach,” he said. “We applaud the government and the Central Bank. We think that the future is digital currency, and we are very curious to see how it’s going to unfold.”

RBC’s competitor, Scotiabank, has already signed on as a partner institution in addition to several Bahamian payment services providers, namely Sun Cash, Omni Money Transfers, Cash N’ Go and Kanoo.

Mr Johnson also said explaining how the digital transformation of RBC is well suited to support clients in this new age of digital banking said, “We have self-service digital options for clients but it started with our ATM’s anumber years ago, but that evolved to our online banking, mobile bank app our self serve advice centre for telephone banking here in the Bahamas. We continue to add new functionality and features on a continuous basis. The future is clearly digital.”

However, several sources familiar with the Project Sand Dollar roll-out said the Bahamian commercial banking industry generally had been slow to participate in the initiative due to misconceptions on what it actually involves.

One, speaking on condition of anonymity, said the banks seemed to view it as a cryptocurrency as opposed to a Central Bank Digital Currency (CBDC) which is backed by the regulator’s external reserves.

“The commercial banks have really been pushing back,” they said. “They’ve not come forward to participate in the Central Bank Digital Currency, the CBDC. They have to get a good understanding of what the CBDC is, and set their systems up to process Sand Dollar transactions. They’re deeming the CBDC a cryptocurrency, which it’s not because it’s backed by the reserves.

“The banks are taking a wait and see approach. Sand Dollar is a secondary activity for them, whereas it’s a primary activity for payments services providers. The banks also did not want to grant payment providers access to the Automated Clearing House that clears and settles transactions between institutions, and which they control, but they’re coming around now.”

Mr Johnson, meanwhile, said RBC was “excited” to see The Bahamas’ long-promised Credit Bureau come to fruition. “It’s one of the things that will equip Bahamians for the future,” he explained. “They will take more control of their financial situation.

Confirming that nothing should stand in the way of the credit bureau’s implementation, Mr Johnson added: “I think it would make it easier for persons to get mainstream banking solutions. If anything it will give us more data, because with more data we can make better decisions.”

The Central Bank has completed the licensing process for Italian-based CRIF SpA. (CRIF) to establish and operate the Credit Bureau some time later this year.