Synthetic Control Analysis of Mobile Money Adoption following CBDC Implementation in The Bahamas

This study evaluates the impact of The Bahamas’ Central Bank Digital Currency (CBDC), the Sand Dollar, on mobile money usage by using the Synthetic Control Method (SCM). By choosing a selection of Small Island Developing States (SIDSs) that did not adopt CBDCs, we construct a synthetic counterfactual scenario to estimate what mobile money adoption would have looked like in the absence of the Sand Dollar. Our results showed that mobile money usage in The Bahamas significantly diverged from its counterpart, suggesting that the Sand Dollar played a critical role in accelerating financial participation.