Two CARICOM Member States to access pan-Caribbean digital payment system

(Caribbean Telecommunications Union Press Release) In six months, Barbados and Jamaica are set to become the first Caribbean territories to access a new pan-Caribbean digital payment settlement system, called CaribDollar (Carib$). Carib$, a stablecoin, is the creation of partners Abed Ventures Inc., out of Barbados, and German entrepreneur, Dr. Jan Schröder.

This revelation came at the Caribbean Telecommunications Union’s (CTU) webinar, Demystifying Cryptocurrency and Digital Cash in the Caribbean held, virtually, on Friday 3 June 2022, which was moderated by Amit Uttamchandani, Technology and Business Professional from Barbados.

As explained in the webinar, along with doing so for the many new features of cryptocurrencies and digital cash, CaribCoin Inc’s Chief System Architect, Dr. Jan Schröder, indicated that a stablecoin is a kind of cryptocurrency, the value of which is pegged against legal tender like the US dollar and/or other commodities such as gold or petroleum. He introduced Carib$ as an example of a stablecoin, stating that “it will be backed by Caribbean assets and will enable the settlement of accounts between traders or vendors doing business in different Caribbean territories (cross-border) in the legal tender of each party’s country of origin without the use intermediaries such as banks, using an online platform to transfer the electronic funds.”

Importantly, Carib$ will also provide a solution for the many unbanked small traders and Small Medium and Micro Enterprises (SMEs) to make payments both seamlessly and instantaneously as well as safely and privately.

Mr. Rodney Taylor, CTU Secretary-General,  noted, “Within an appropriate regulatory framework, digital currencies can potentially deepen the Caribbean Community’s  Single Market and Economy (CSME) thrust.”

Economist, Marla Dukharan, also speaking at the event, noted, “The region is in need of innovative solutions to meet the need of the poor and those operating in the informal economy, such as hucksters and other small traders.”  She added, “With no robust and efficient trade settlement system for such categories of business, digital currency provides a viable alternative. Digital currencies also provide additional options for the poor in the region who depend on remittances to survive, since the cost of transfer using traditional means varies between three to twenty-five percent of the value of the funds being transferred.”

Sharing on the Organisation of Eastern Caribbean States’ experience with digital currency, Sharmyn Powell, Chair, FinTech Group, Eastern Caribbean Central Bank, noted, “The Central Bank sought to address some recurring issues in its financial system with its new digital currency, DCash, namely, the high cost of current payment methods and banking services; the inadequacy of banking services in addressing the needs of the unbanked customers; and the inefficiencies in the financial management systems of  unbanked small traders, which could slow the pace of commerce.”

Adding another perspective, Vashti Maharaj, Adviser, Digital Trade Policy at Trade Oceans and Natural Resources at the Commonwealth Secretariat stated, “Cultural barriers, such as resistance to change and limitations with financial literacy or digital skills, will require emphasis to be placed on public awareness, education and capacity building in order to promote the ready adoption of the new technologies.” 

Stakeholders may view the recording of the webinar, Demystifying Cryptocurrency and Digital Cash in the Caribbean here.