Residents and retailers in Bermuda are taking part in a pilot to test the viability of a “digital stimulus token”, which the Bermudan Government hopes to use to distribute financial aid more efficiently and to facilitate the purchase of food and other essential items during and beyond the Covid-19 pandemic.
“The tokens are sent to a digital wallet on a recipient’s phone and can be used to pay for goods and services at participating vendors,” Bermuda’s Royal Gazette reports. “The tokens are spent at a retailer or vendor by scanning a QR code on a small point-of-sale device.
“The vendor can later press a redeem button and the tokens are transferred to a Stablehouse government account, and then a cash wire transfer for the value of the tokens goes from the government to the vendor.”
“The project has been in development since last year as part of the Government’s initiative to support the adoption of digital currencies on the island,” the publication adds.
“Those plans were put on fast-forward due to the Covid-19 outbreak as a possible solution to the need for fast and efficient distribution of financial aid.”
The Bermudan government has developed the token in partnership with Stablehouse, a Bermuda-based payment and foreign exchange platform for asset-backed stablecoin cryptocurrencies.
“A stimulus token is providing people in need with emergency money. The problem is, it has been difficult for people to receive their cheques, or bank transfers that are slow or with details are not up to date, or people not banked,” Stablehouse CEO Philippe Bekhazi told The Royal Gazette.
“What we are proposing is bypassing all the middle men, bypassing the banks, and airdrop what is basically an IOU from the government to the people.
“You will go to a website and register your ID, and the Government will airdrop to you a certain amount of money. It will be immediate and you will have it on your phone wallet.
“You can then go to all the participating merchants on the island, scan a QR code and pay for food, groceries, taxis — any product or service that is using this Stablehouse payment infrastructure.”
Bermudan Premier David Burt has taken part in the pilot and says he is “encouraged by the potential to provide a platform for stimulus programmes. It also shows great promise as a means to help make digital payments more accessible to small businesses and entrepreneurs, which is particularly important in this challenging economic climate.”
If successful, the pilot will be rolled out more widely to merchants in Bermuda’s Economic Empowerment Zones.