Mastercard and Island Pay Introduce Central Bank Digital Currency-Linked Card

Mastercard, Central Bank of The Bahamas and Island Pay have collaborated to launch a new program to give people additional option to use The Bahamas Sand Dollar central bank digital currency.

Under the new program, the Bahamas Sand Dollar prepaid card allows people to instantly convert the digital currency to traditional Bahamian dollars and pay for goods and services anywhere Mastercard is accepted on the Islands and across the world. 

The digital Sand Dollar, which carries the same value and consumer protections as a traditional Bahamian dollar, is issued by the Central Bank of The Bahamas. There are 700 small islands and over 5000 square miles of water in The Bahamas, which makes cash money movement costly in the region. As a result, a central bank digital currency (CBDC) becomes a preferred digital payment in The Bahamas.

The Sand Dollar is originally piloted in 2019 and became the first fully-deployed digital version of a country's fiat currency in October 2020. At that time, only registered users have exclusive access to the Sand Dollar through a digital app at select merchants. Island Pay mobile wallet users can choose to transact in Sand Dollars or Bahamian dollars at merchants using the mobile app.

Mastercard's virtual testing environment simulates the issuance, distribution and exchange of CBDCs between banks, financial service providers and people. Its innovative work with CBDCs supports governments globally as they explore, test and deploy real-life use cases across existing payment rails. 

The combination of Island Pay's technology platform with Mastercard technology and Mastercard's wide merchant acceptance has the potential to help reduce the operational distribution costs of cash and modernize the overall payments system of The Bahamas.