## Digital Dollars for Online Tea ## Source details **Canonical URL:** [Digital Dollars for Online Tea](https://www.imf.org/en/publications/fandd/issues/2021/03/fighting-pandemic-disruption-with-innovation-dorst) ## Other formats - [Markdown version](/en/publications/fandd/issues/2021/03/fighting-pandemic-disruption-with-innovation-dorst/index.md) - [Structured JSON version](/en/publications/fandd/issues/2021/03/fighting-pandemic-disruption-with-innovation-dorst/index.json) - [Bundle manifest](/en/publications/fandd/issues/2021/03/fighting-pandemic-disruption-with-innovation-dorst/bundle-manifest.json) ## Bibliographic details - Authors: STEVEN DORST - Published: March 1, 2021 --- ### Overview - Innovators in The Bahamas, Sri Lanka, and Uganda responded to COVID-19 disruption with rapid digital solutions that extended financial access, preserved critical markets, and created new e-commerce channels. - Common enabling factor: an environment that allowed rapid, homegrown innovation to scale and serve underserved populations. ### The Bahamas: first digital currency - Launched in October 2020: the world’s first central bank digital currency—the sand dollar. - Design and features: - Pegged one-to-one to the Bahamian dollar. - Uses a blockchain-backed digital token. - Issued and regulated by The Bahamas’ central bank. - Accessible to people and businesses to buy and sell goods and services and send money. - Does not require a bank account or a mobile phone for use (though most transactions use mobile phones). - Motivations and context: - The Bahamas territory is spread out over 700 islands, making ATMs and branches unprofitable on remote islands. - Extreme weather events increase infrastructure costs and exacerbate lack of access. - The need to serve the unbanked and underbanked and to modernize the payment system. - Accelerants for rollout: 2019’s Hurricane Dorian and the COVID-19 pandemic. - Early rollout and uptake: - Following pilots, central bank distributed sand dollars to commercial banks, payment system providers, and money transfer operators. - Funds are placed in clients’ digital wallets with access limits and transaction thresholds. - Circulation level (early days): $130,000 worth of sand dollars in circulation compared with $500 million Bahamian dollars. - Reported user benefits: ease, faster turnaround, lower costs, no fees or transaction costs in some use cases, and safety of cashless transactions. ### Sri Lanka: digitalizing a 125-year-old tea auction - Context and importance: - Tea industry employs millions; 10 percent of Sri Lankans derive an income from the tea industry. - Tea exports generated more than $1.2 billion in export revenues in 2020. - The Ceylon tea auction had operated for more than 125 years, convening twice a week at the Ceylon Chamber of Commerce. - Crisis and response: - COVID-19 prevented the weekly live auction from convening, halting sales and jeopardizing millions of livelihoods. - A task force including the Sri Lanka Tea Board, technical experts, government, brokers, and auctioneers collaborated to build a digital solution. - Technical and operational rollout: - Local IT company CICRA Holdings led technical development and worked with brokers to translate live-auction dynamics into an e-platform. - Training: within days, about 300 people participated in simulated training programs, with sessions running up to the night before launch. - Deployment timeline: built a solution and launched the first digital auction on April 4, 2020. - Reported outcomes: - The digital auction is COVID-safe, faster, more strategic, cost-effective, and yields higher prices. - Improvements in transparency, efficiency, and reduced duplication of work. - Continuity of sales allowed estates to continue operations and pay workers; pluckers reported receiving salaries during the pandemic. ### Uganda: SafeBoda’s pivot to e-commerce and financial inclusion - Pre-pandemic context: - SafeBoda launched in 2015 as a safer motorcycle-taxi (boda boda) service connecting riders and drivers through a mobile app. - In 2017 SafeBoda introduced a wallet to document drivers’ income, expanding access to financial services for informal-sector drivers. - Pandemic shock and rapid pivot: - When COVID-19 hit in March 2020, mobility restrictions grounded vehicles and commerce stalled. - SafeBoda partnered with local vendors and UN Capital Development Fund and digital experts to launch a new digital service, Shop, within two weeks. - Scale and reach: - SafeBoda app has more than 1 million downloads. - Platform connects customers to nearly 1,000 food vendors, 350 shops, 16 markets, and 21 United Nations Population Fund (UNFPA) pharmacies through 20,000 moto drivers in Kampala. - Reported impacts: - Enabled access to food, medicine, and income-generating deliveries during lockdown. - Helped vendors increase earnings—examples include paying rent and school fees. - Drivers reported increased earnings from rides plus deliveries. - The service reduced exposure to COVID-19 through cashless, minimally invasive transactions and stimulated the local digital economy. ### Cross-cutting lessons and implications - Urgent need plus entrepreneurial drive can accelerate technology adoption and institutional innovation. - Critical success factors observed: - Strong public–private collaboration (e.g., central bank with payment providers; tea board with IT firms and brokers; SafeBoda with UN and local vendors). - Rapid prototyping, training, and iterative deployment (days to weeks). - Design choices that prioritize inclusivity (works without bank accounts or mobile phones in some cases; documents informal incomes). - Crisis conditions can catalyze long-delayed modernization (e.g., 20 years of discussion around digital tea auctions accelerated into days). - Outcomes for underserved populations: - Extended financial access in remote and informal contexts. - Preservation of livelihoods and continuity of critical commodity markets. - Creation of new revenue streams and improved transparency and efficiency in market mechanisms. *STEVEN DORST, March 2021 — Digital Dollars for Online Tea, F&D* --- ## Content in this bundle - **بيع الشاي عبر الإنترنت مقابل دولارات رقمية** - [بيع الشاي عبر الإنترنت مقابل دولارات رقمية (Markdown version)](/-/media/files/publications/fandd/article/2021/march/ar/dorst-ar.pdf.md){rel="alternate" type="text/markdown"} - [بيع الشاي عبر الإنترنت مقابل دولارات رقمية (PDF)](/-/media/files/publications/fandd/article/2021/march/ar/dorst-ar.pdf){rel="external" type="application/pdf"} - **数字货币在线上茶叶市场找到用武之地 - 金融与发展 - 国际货币基金组织季刊 -2021年3月号·第58卷** - [数字货币在线上茶叶市场找到用武之地 - 金融与发展 - 国际货币基金组织季刊 -2021年3月号·第58卷 (Markdown version)](/-/media/files/publications/fandd/article/2021/march/chn/dorst-chn.pdf.md){rel="alternate" type="text/markdown"} - [数字货币在线上茶叶市场找到用武之地 - 金融与发展 - 国际货币基金组织季刊 -2021年3月号·第58卷 (PDF)](/-/media/files/publications/fandd/article/2021/march/chn/dorst-chn.pdf){rel="external" type="application/pdf"} - **Digital Dollars for Online Tea – IMF F&D** - [Digital Dollars for Online Tea – IMF F&D (Markdown version)](/-/media/files/publications/fandd/article/2021/march/en/fighting-pandemic-disruption-with-innovation-dorst-en.pdf.md){rel="alternate" type="text/markdown"} - [Digital Dollars for Online Tea – IMF F&D (PDF)](/-/media/files/publications/fandd/article/2021/march/en/fighting-pandemic-disruption-with-innovation-dorst-en.pdf){rel="external" type="application/pdf"} - **Dólares digitales y té en línea ● Finanzas y Desarrollo ● Marzo de 2021** - [Dólares digitales y té en línea ● Finanzas y Desarrollo ● Marzo de 2021 (Markdown version)](/-/media/files/publications/fandd/article/2021/march/es/fighting-pandemic-disruption-with-innovation-dorst-es.pdf.md){rel="alternate" type="text/markdown"} - [Dólares digitales y té en línea ● Finanzas y Desarrollo ● Marzo de 2021 (PDF)](/-/media/files/publications/fandd/article/2021/march/es/fighting-pandemic-disruption-with-innovation-dorst-es.pdf){rel="external" type="application/pdf"} - **Цифровые доллары за чай в режиме «онлайн» – Финансы и развитие – март 2021 года** - [Цифровые доллары за чай в режиме «онлайн» – Финансы и развитие – март 2021 года (Markdown version)](/-/media/files/publications/fandd/article/2021/march/ru/dorst-ru.pdf.md){rel="alternate" type="text/markdown"} - [Цифровые доллары за чай в режиме «онлайн» – Финансы и развитие – март 2021 года (PDF)](/-/media/files/publications/fandd/article/2021/march/ru/dorst-ru.pdf){rel="external" type="application/pdf"} --- _Source: https://www.imf.org/en/publications/fandd/issues/2021/03/fighting-pandemic-disruption-with-innovation-dorst_