Western Hemisphere > Bahamas, The

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Mr. Tobias Adrian

We have all felt the frustration of sending money abroad. It takes time. It’s expensive. It’s cumbersome. And to some of us, it’s embarrassing—because our friends who know we’re economists always ask us what is going on behind the scenes, and the truth is we don’t really know. It’s messy.

International Monetary Fund. Communications Department

CENTRAL BANK DIGITAL CURRENCIES (CBDCs) are digital versions of cash that are issued and regulated by central banks. As such, they are more secure and inherently not volatile, unlike crypto assets.

Mr. Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Mr. Damiano Sandri, Hervé Tourpe, and Mr. German Villegas Bauer
Whether in crypto assets or in CBDCs, design choices can make an important difference to the energy consumption of digital currencies. This paper establishes the main components and technological options that determine the energy profile of digital currencies. It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems and derives implications for the design of environmentally friendly CBDCs. For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm. While crypto assets like Bitcoin are wasteful in terms of resources, other designs could be more energy efficient than existing payment systems.
International Monetary Fund. Western Hemisphere Dept.

1. COVID-19 has exacted a tragic toll on The Bahamas, but the economy is starting to get back on its feet. More than 33,368 cases have been reported as of April 2022, with over 789 deaths (Figure 1). Containment measures were put in place in March 2020 and subsequently eased through successive waves of the pandemic. The rapid surge in cases in late 2021 because of the Omicron variant has now quickly subsided. With about forty percent of the population fully vaccinated, The Bahamas is lagging other countries in the region.