John Rolle on The Bahamas' Fixed Exchange Rate and the First Nationwide Central Bank Digital Currency

Small fixed-exchange-rate economies like the Bahamas trade monetary independence and capital-flow freedom for currency stability, backed by large reserves and capital controls.

• The fixed-peg mechanics: Bahamian dollar has pegged 1:1 to the USD since the 1960s; law requires foreign reserves cover at least 50% of demand liabilities, though actual coverage has exceeded 100%.
• Trilemma trade-off: The Bahamas sacrifices free capital flows (via capital controls) to keep both the peg and some policy discretion, per Governor John Rolle.

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