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Digital Milestone for Eastern Caribbean Dollar

Posted by Caribbean World Magazine on 8 April 2021 | 0 Comments

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8 April 2021

Bid to reduce the use of physical cash by 50% by 2025 to bring about a safer,
faster and cheaper system of transactions

In a bid to speed up transactions and the large numbers of unbanked people, the Eastern Caribbean has created its own form of digital currency. Called DCash, the system will serve people without bank accounts, according to Eastern Caribbean Central Bank as the first such blockchain-based currency introduced by any of the world’s currency unions, though some individual nations have similar existing systems.

Available in four island nations - St Lucia, Grenada, Antigua and Barbuda, and St. Kitts and Nevis - under a yearlong pilot program, the innovation is considered a milestone in the history of monetary instruments. Unlike cryptocurrencies, DCash is issued by an official central bank and has a fixed value, tied to the existing Eastern Caribbean dollar used across much of the region. It is the brainchild of Barbados-based fintech company Bitt in partnership with the central bank.

The system allows users without bank accounts — but with a smartphone — to use a downloaded app and make payments via a QR code. Previously those without bank accounts would go to an approved agent or non-banking financial institution who would verify a person’s information and then approve a “DCash” wallet. That person would then go to a supermarket or other store and give the cashier physical cash which would then be deposited as digital currency in their wallet.

The historic move has heralded an era of greater personal financial control for many people throughout the Eastern Caribbean. However, some critics have raised concerns that digital currency issued by smaller countries could be used as a conduit for illicit activities, including money laundering, organised crime and terrorism. Yet DCash is seen as an inevitable next step as banking around the world faces the a continued decline in the use of physical cash.

The Bahamas rolled out a similar digital currency system in 2019 and has a similar percentage of people who remain unbanked. The digital currency will shortly be available in Anguilla, Dominica, Montserrat and St. Vincent and the Grenadines, which form part of the eight island economies under the Eastern Caribbean Central Bank.

The project aims to see a 50 per cent reduction in the use of physical cash throughout the Eastern Caribbean region by 2025 to bring about a safer, faster and cheaper system of transactions. Not only is it harder to steal digital cash but it is also a safer way to make payments while avoiding contact during the pandemic.

Those already signed up include farmers, fishermen, small business owners, single mothers and people without bank accounts, among others. All Eastern Caribbean notes feature Queen Elizabeth II of England as head of the Commonwealth.