Caribbean Association of Banks Inc. has extended congratulations to the Eastern Caribbean Central Bank on its recently-announced digital currency pilot project, which is expected to positively impact the finance sector
The Caribbean Association of Banks Inc. (CAB) has committed its support to the Eastern Caribbean Central Bank (ECCB), and that latter organisation’s decision to issue a blockchain-issued Central Bank Digital Currency (CBDC) in 2019. The announcement of the digital currency pilot was made by Governor of the ECCB, Dr. Timothy N. J. Antoine, on March 4th 2019. Dr. Antoine revealed that the ECCB will partner with Barbados-based fintech company, Bitt Inc. (Bitt) to develop and pilot the digital Eastern Caribbean currency, with a supporting digital payments and transfers infrastructure.
The CAB has congratulated the ECCB on taking this bold step. With the advent of the digital EC Dollar, which is set to become the world’s first digital legal tender currency issued by a central bank, the region is being thrust to the forefront of financial technology. The potential benefits of digital currency are many, for banks, vendors, and customers. Aside from a lower reliance on cash, and a reduction in overall transactional costs, a secure, resilient digital payment and settlement platform is expected to have a net positive effect on the growth and development of the Caribbean financial sector.
Dr. Antoine says, “The aim of the pilot is to ascertain the suitability of blockchain technology to help boost economic growth and competitiveness in the region consistent with the ECCB’s monetary and financial stability objectives. Furthermore, as the ECCB promotes the safety and soundness of the financial system in the ECCU, it also has a responsibility to encourage and support innovation consistent with the Bank’s mandate to facilitate the balanced growth and development of member countries. To that end, blockchain technology merits our attention and consideration at this time”.
Concurrent with the announced creation and deployment of the digital currency, the ECCB and Bitt have said they will collaborate on a KYC/AML/CFT (Know Your Customer, Anti-Money Laundering, and Combating the Financing of Terrorism) data management, compliance and transaction monitoring system. This is intended to improve the risk profile of the Eastern Caribbean Currency Union (ECCU) and mitigate against the trend of de-risking by the region’s correspondent banking partners, issues with which the CAB is heavily engaged on behalf of its member institutions across the Caribbean.
The Centrale Bank van Curacao en Sint Maarten (CBCS) is also exploring the creation of a central bank-backed digital currency with Bitt.