Governor Timothy Antoine
Plans are in progress for the Eastern Caribbean Central Bank (ECCB) to implement a change from paper notes to polymer notes by May or June of this year. At the same time, the ECCB, in conjunction with Bitt Inc. of Barbados, has announced plans to execute a pilot project, within the next eighteen months, that would enable the people of the Eastern Caribbean currency union to replace cash with digital currency.
The announcement was made at an ECCB media teleconference on Tuesday, March 12th, involving all the eight-member countries of the ECCU. Facilitators of the conference were Gov. Timothy Antoine of ECCB; and CEO of Bitt Inc., Mr. Rawdon Adams.
The introduction of digital currency highlights the fact that Bitt Inc. would provide individuals or businesses with a mobile wallet that will enable them to receive and send money globally to or from their mobile devices or PCs; and send payments for goods or services over the Internet or directly to friends and family via their mobile devices.
According to Gov. Antoine, the use of digital EC currency (DXCD) would enable all Eastern Caribbean currency holders to eliminate the high costs associated with using cash for transactions, and he stressed that the change from cash to digital currency would well serve the people of the ECCU as regards the potential for financial transformation in the 21st century.
Gov. Antoine, in his address to the conference, gave a full explanation of the reasons for the project and how it is expected to function: “At this juncture in the history of our development in the Eastern Caribbean Currency Union, we must, in the words of Bob Black, American author, ‘march off the edge of our maps’.
“Some of you may be wondering what, precisely, is the motivation of the Eastern Caribbean Central Bank (ECCB) in making this bold move? Simply put, it is shared prosperity for the citizens and residents of the Eastern Caribbean Currency Union. In our Strategic Plan 2017-2021, we made the case for socio-economic transformation and issued a clarion call for collective action to transform the ECCU together.
“I have said it before, and I reiterate it today, such transformation is not possible without digital disruption. I therefore urge us to avoid a ‘failure of imagination’ as we craft the way forward. We must never forget that all the technologies that we now take for granted today, including our smart-phones, were once mere ideas. Yes, as William Blake, visionary British poet pointedly reminds us, ‘what is now proved was once only imagined’. For our region to improve our development prospects and performance, we must expedite our digital transition. To this end, regulators and innovators must work together.
“This pilot project exemplifies this collaboration. Bitt first approached the ECCB about two years ago with the idea of a digital EC dollar. As we continued thinking about transformation of the ECCU, we became intrigued by the possibility of a digital fiat currency for our region. At that time, we were finalizing our Strategic Plan and we made a decision to test and learn more about this idea through a pilot. Five months after the launch of our Strategic Plan, we signed an MoU with Bitt in March 2018 to collaborate on this idea, and so our journey to this pilot began.
“Cash has its convenience and will continue to play an important role in our economy for the foreseeable future. That said, the ECCB is committed to reduce our region’s use of cash and cheques. Why? In the ECCU, about 80% of all payments are effected using cash or cheques. When we survey our current payments landscape, we cannot help but conclude that payments are still too slow and too expensive. Many of us know, only too well, the high costs associated with certain banking services. Although a full-scale analysis of the social cost of physical cash in the ECCU has not been carried out, it is indisputable that the costs of cash services, inclusive of transporting, storing and securing, are extremely high. Invariably, these high costs (not fully recognised by many businesses) are passed on to consumers.
“This ECCB Central Bank Digital Currency (CBDC) pilot project involves a securely minted and issued digital version of the EC dollar (DXCD). The digital EC dollar will be issued by the ECCB and distributed by licensed bank and non-bank financial institutions in the ECCU. For the avoidance of any doubt, the digital currency will operate alongside cash as currently obtains. Indeed, the ECCB will soon launch a new family of bank notes using polymer. The DXCD will be used for financial transactions between consumers and merchants, including peer-to-peer transactions, all using smart devices.
“The objective of this pilot project is to assess the potential efficiency and welfare gains that could be achieved – deeper financial inclusion, economic growth, resilience and competitiveness in the ECCU – from the introduction of a digital sovereign currency. Throughout the 18-month period of the pilot, there will be education initiatives to facilitate active public engagement throughout all member countries. The pilot will be deployed in three (3) member countries based on the interest in participating in the pilot expressed by licensed financial institutions domiciled in the countries, as well as other criteria including: institutional capacity, geographic representation (Windwards and Leewards) and supporting technology infrastructure. It will be conducted under the supervision of the ECCB and within a controlled environment (sandbox type arrangement).
“The time to act is now. I issue a clarion call for partnership. I invite non-bank financial institutions who provide wallet services to join this effort. I invite telecommunication service providers, and other technology companies, to join this effort as we develop a digital ecosystem from which our region can reap huge digital dividends.
“Most importantly, I invite the citizens and residents of the ECCU to share your views on how this pilot could best serve you. With laser-like focus, let us now move forward with the EC digital currency pilot project, determined to make a significant difference in the lives of the people of the Eastern Caribbean Currency Union.”
At the end of Gov. Antoine’s address, Bitt’s CEO, Rawdon Adams, gave convincing deliberations regarding Bitt’s partnership with the pilot project. Several questions of concern were posed from many of the islands’ media representatives in the Union. These were aptly responded to by Gov. Antoine and Mr. Adams.
– Written by Staff Reporter, James R. Harrigan
