Eight Caribbean Island Economies Could Adopt Central Bank-Issued Cryptocurrency

According to an MoU signed by the premier of Montserrat, the eight island economies comprising the Eastern Caribbean Currency Union may have a central bank-issued cryptocurrency in their future.

  • In a February 15 Facebook post, the Government Information Unit Montserrat revealed that Donaldson Romeo, the British Territory’s premier and finance minister, has signed a Memorandum of Understanding (MoU) with Bitt Inc., a Barbados-based FinTech and blockchain startup. According to the announcement, the MoU signals the parties’ intention to create what the Information Unit calls a “Digital Payments Ecosystem” on the Caribbean island.

    The agreement calls for a study to be conducted into the “viability and functionality” of the Digital Eastern Caribbean dollar (DXCD). The DXCD would be a blockchain-based analog of the Eastern Caribbean dollar, a currency issued by the Eastern Caribbean Central Bank (ECCB) on behalf of the eight island economies. The polities that the ECCB serves, Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines, are collectively known as the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean dollar is pegged in value to the US dollar and is backed with reserves of foreign currency.

    The press release indicates that Bitt Inc.’s software is capable of minting immutable DXCDs, and that with the ECCB’s blessing, these digital tokens would be considered “legal tender” across the ECCU.

    The DXCD feasibility study will apparently include test deployments of the currency in “controlled environments.”

    According to the Facebook post, various private sector entities, as well as commercial banks and the ECCB itself, will work with Bitt Inc. and Montserrat to build the proposed ecosystem.

    “The decision to move closer to a cashless society is in keeping with our overall development strategy, and also that of the ECCB,” Romeo said. “Creating a modern, digital financial ecosystem, is a key element of this drive to build back better.”

    Lauding the project, Romeo also noted that the “use of cash, as we all know, has risks and costs associated with it. It costs money to print money, and saving in cash ‘under the mattress’ and walking around with cash can be risky.”

    Other Caribbean governments, including those of Bermuda and Antigua and Barbuda, have previously expressed interest in cryptocurrency and blockchain technology.

    In late 2017, a plot of land on Saint Vincent and the Grenadines was listed for sale in bitcoin.

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