The Bahamas' central bank digital currency (CBDC), known as the sand dollar, needs better coverage and more security to achieve its goals, the International Monetary Fund (IMF) said in a report released Monday.
In a review of the Caribbean nation's economic and fiscal policies, the IMF noted that the sand dollar represents only 0.1% of the currency in circulation.
The country's central bank should "continue to build its internal capacity-including in terms of cybersecurity and the resilience of systems linked to the sand dollar," the IMF said, adding that "there are currently limited opportunities to use the sand dollar.
Bahamian authorities plan to expand public information campaigns about the CBDC in response to the report, said Philip Jennings, IMF executive director in charge of that country.
Along with Nigeria and China, the Bahamas pioneered the introduction of a CBDC, seeing it as a good way to reach people on the archipelago's hundreds of widely scattered islands. Recently, the country confirmed that citizens can use it to pay their taxes.
The IMF, which may have felt its own power threatened by Bitcoin, has been largely skeptical of the use of private cryptocurrencies in countries like El Salvador and Argentina. He has taken a warmer stance toward state-controlled cryptocurrencies such as CBDCs. According to a recent survey by the Bank for International Settlements, 9 out of 10 central banks are considering their own CBDCs.