The Eastern Caribbean Central Bank (ECCB) will be piloting a blockchain-issued Central Bank Digital Currency (CBDC) within the Eastern Caribbean Currency Union (ECCU).
The announcement of a contract between the ECCB and Barbados-based fintech company, Bitt Inc. (Bitt) that was signed on February 21st, 2019 has been creating a buzz around the region.
In describing this move as “a game-changer for the way we do business,” Governor of the ECCB, Mr. Timothy Antoine noted that, “Not only will the digital EC Dollar be the world’s first digital legal tender currency to be issued by a central bank on blockchain but this pilot is also a live CBDC deployment with a view to an eventual phased public rollout. The pilot is part of the ECCB’s Strategic Plan 2017-2021 which aims to help reduce cash usage within the ECCU by 50 per cent, promote greater financial sector stability, and expedite the growth and development of our member countries.”
The ECCB stated in a press release that the Central Bank Digital Currency pilot “is the first of its kind and will involve a securely minted and issued digital version of the EC dollar (DXCD).”
The ECCB further commemted, “The digital EC dollar will be distributed and used by Licensed Financial Institutions and Non-Bank Financial Institutions in the ECCU. The DXCD will be used for financial transactions between consumers and merchants, including peer-to-peer transactions, all using smart devices. For example, an individual in St Kitts and Nevis will be able to send DXCD securely from his/her smartphone to a friend in Grenada in seconds - and at no cost to either party.”
Prime Minister of St. Kitts and Nevis, Dr. the Honourable Timothy Harris, has welcomed the decision and has said that ,“This move by the central bank will undoubtedly transform the financial space within the ECCU sub-region, while at the same time enhance economic growth. More importantly, I believe the introduction of a secure digital currency will redound to the overall benefit of the ordinary citizens of the currency union.”
The ECCB will reportedly embark on the DXCD pilot from March 2019. It is expected that the pilot project will be executed in two phases: development and testing, for about twelve months, followed by rollout and implementation in pilot countries for about six months.
As part of pilot implementation, the central bank will ramp up its sensitization and education initiatives to facilitate active public engagement throughout all member countries.