The Eastern Caribbean Central Bank (ECCB) has signed a Memorandum of Understanding (MoU) with Bitt Inc., a Barbados-based fintech company, to administer a blockchain technology pilot in ECCB member countries to make banking practices more secure.
Over the course of the pilot, Bitt Inc. and the ECCB will work together to create and test technology that is intended to address Know-Your-Customer (KYC), Anti-Money-Laundering (AML), and Combating the Financing of Terrorism (CFT) practices. According to a report by Finextra, the two entities will use blockchain for data management, ensuring compliance, and monitoring transactions.
— Bitt (@BittGlobal) March 13, 2018
The pilot is part of an effort to develop a secure, globally compliant platform for digital payments and settlements. Finextra also reported that Bitt and ECCB are working to issue an Eastern Caribbean digital currency that will be used alongside the traditional EC fiat currency.
Controlled testing of the pilot will begin later this year.
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Blockchain Technology “Merits Our Attention”
The ECCB also hopes that the pilot will slow the trend of ‘de-risking’ in the region–’de-risking’ happens when larger international banks pull out of the region as a response to the United States labeling the Caribbean a hotbed of criminal financial activity. The practice has caused a shortage of USD reserves, which has subsequently taken a hefty toll on regional trade.
Timothy N.J. Antoine, governor of the ECCB, said that the collaboration with Bitt is just one aspect of a larger strategic plan that has been in operation since 2017: “The aim of the pilot is to ascertain the suitability of blockchain technology to help boost economic growth and competitiveness in the region consistent with the ECCB’s monetary and financial stability objectives.”
“Furthermore,” he added, “as the ECCB promotes the safety and soundness of the financial system in the ECCU, it also has a responsibility to encourage and support innovation consistent with the Bank’s mandate to facilitate the balanced growth and development of member countries.”
“To that end, blockchain technology merits our attention and consideration at this time.”
Bitt Steps Further into the Carribean
Bitt’s MoU with the ECCB is the second of two high-profile collaborations within the region. In February, a Facebook post by the Government Information Unit Montserrat announced that Finance Minister Donaldson Romeo had signed an MoU with Bitt to create a “Digital Payments Ecosystem”.
This MoU called for the investigation of the “viability and functionality” of the so-called Digital Eastern Carribean Dollar (DXCD). With the ECCB’s approval, DXCD tokens could be classified as legal tender across the eight islands that make up the Eastern Caribbean Currency Union (ECCU).
At the time, Romeo said that “the decision to move closer to a cashless society is in keeping with our overall development strategy, and also that of the ECCB. Creating a modern, digital financial ecosystem, is a key element of this drive to build back better.”