April 14, 2021

PR Headline News

Top Stories Without The Fluff

Caribbean islands launch their digital currency

San Juan. The Eastern Caribbean created its own form of digital currency with the goal of streamlining transactions and serving people who do not have bank accounts.

The Central Bank of the Eastern Caribbean said its DCash It is the first blockchain-based currency of its kind to be launched by any of the monetary unions in the world, although some individual countries already have similar systems.

The digital currency became available from Wednesday in four island nations according to a one-year pilot program: Saint Lucia, Grenada, Antigua and Barbuda, and Saint Kitts and Nevis.

“It is a milestone in the history of monetary instruments,” Bitt CEO Brian Popelka said during an online press conference.

DCash was created by Barbados-based financial technology company Bitt in partnership with the central bank. Unlike cryptocurrencies, DCash is issued by an official central bank and has a fixed value indexed to the current Eastern Caribbean dollar that is used in much of the region.

The system allows users, even those who do not have a bank account but have a smartphone, download an application and make payments using a QR code. Those without a bank account can go to a previously authorized agent or non-bank financial institution to have their information verified in order to approve a “DCash” wallet. Later, the person would go to a supermarket or some other store to deposit cash in their wallet, Bitt spokesman Chris Burnett explained to The Associated Press.

Also, there is a limit to the amount of money that can be sent through DCash. At the moment there are no plans to integrate credit cards and interest is not applied to the digital currency.

While many in the eastern Caribbean welcomed the landmark move, some experts worry that digital currency issued by small countries could end up being used in illicit activities, such as terrorist financing and money laundering, said Eswar Prasad, a trade policy professor at Cornell University.

“That skepticism is diminishing as more central banks get involved and as central banks around the world face the inevitable reduction in the use of cash,” he said.

Stressed that The Bahamas last year became the first country to launch its digital currency domestically, with the Marshall Islands considering having its own cryptocurrency.. For smaller countries, “the stakes are higher” in part because many people still do not have a bank account, he added.

“For this reason it seems to me that small countries are being more aggressive in this regard, simply because they have to be,” said Prasad.

The authorities said that by September the digital currency will be available in Anguilla, Dominica, Montserrat and Saint Vincent and the Grenadines, which are part of the eight island economies that make up the Central Bank of the Eastern Caribbean.

The project aims reduce 50% in cash usage by 2025said Sharmyn Powell, chair of the bank’s fintech task force.

“It’s safer, faster and cheaper,” Powell said.

Central Bank Governor Timothy NJ Antoine said he contemplates the use of digital currency by farmers, fishermen, small business owners, single mothers and people without bank accounts.

“Payments are still too slow and too expensive,” Antoine said, referring to the current system. “We have listened to them and we have complied with them.”

According to Antoine, it is more difficult to steal digital money and it is a safe way to make payments and avoid contact during the pandemic.

A Eastern Caribbean dollar currently equals 37 US cents. All Eastern Caribbean banknotes, of whatever denomination, bear the image of Queen Elizabeth II of England as head of the Commonwealth of Nations.

The project takes place more than two months after the European Central Bank, the Bank of Japan, the Bank of Canada, the Bank of England, the Riksbank of Sweden and the Swiss National Bank created a group to study the possibility of issuing coins. digital.

The Swedish central bank has already commissioned a pilot program. For its part, China launched a digital currency in four cities in April 2020 as part of a pilot program that has since expanded to more than 20 cities.

However, it remains to be seen whether the central bank’s digital currency is the future, said Lee Rainers, professor of fintech law and policy at Duke University.

“I approach the matter with some skepticism because this technology has existed for more than 10 years, but it has not taken off as a general means of exchange,” he said.

Source link