The monetary authority of eight island economies in the Eastern Caribbean has agreed to take part in a pilot program that will involve issuing a digital currency.
According to a press release dated March 14, the Eastern Caribbean Central Bank (ECCB) has signed a Memorandum of Understanding with FinTech firm Bitt Inc. for a multifaceted blockchain pilot that will involve the “issuance of a digital [Eastern Caribbean] currency which will operate alongside” physical Eastern Caribbean currency.
The ECCB acts as the monetary authority for eight Caribbean economies – those of Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines – which are collectively known as the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean dollar, which the bank issues, is pegged to the US dollar and is backed by substantial foreign currency reserves.
In addition to the trial of the central bank-issued virtual currency, the pilot will include know-your-customer, anti-money laundering, and combatting the financing of terrorism initiatives, as well as the development of a “digital payment and settlement platform.” Through a spokesperson, Bitt Inc. CEO Rawdon Adams told ETHNews that the system is intended to support P2P transactions in addition to the “institution to individual and potentially central bank to institution” varieties.
The project, which is slated to take place under ECCB supervision sometime this year, will be conducted in “controlled environments.”
ECCB governor Timothy N.J. Antoine said of the program:
“This fintech pilot is part of the Bank’s Strategic Plan 2017-2021 … 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 … To that end, blockchain technology merits our attention and consideration at this time.”
The pilot is apparently distinct from another project by Bitt Inc., along with the administration of Montserrat premier Donaldson Romeo, to trial a digital version of the Eastern Caribbean dollar.
Shortly after that project was announced, it emerged that at least one state-supported ICO is expected to take place in Antigua and Barbuda.
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