Sunday, 14th July 2024

Barbados, Jamaica to start using Carib Dollar, new digital payment settlement plan in 6 months

Sunday, 7th July 2024

Barbados, Jamaica to start using Carib Dollar, new digital payment settlement plan in 6 months
Jamaica and Barbados are likely to become the first countries in the Caribbean to get access to Carib Dollar, which is the region's new digital payment settlement plan. As per reports, the transition will take place in the next six months.  Carib Dollar or Carib$ is a stable coin (a type of cryptocurrency) established by Barbados-based Abed Ventures Inc and German entrepreneur Dr Jan Schröder. Dr Jan Schröder- who is the Chief system architect at CaribCoin Inc, stated that the Carib$ has the potential to transform trade and the wider Caribbean business landscape. He suggested that a stablecoin, like cryptocurrencies, might be pegged to legal denominations such as the US dollar and other commodities like gold or petroleum. "Carib$ 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 of intermediaries like banks, using an online platform to transfer electronic funds," he said. The digital payment system will also provide a solution for the unbanked, allowing small merchants and micro, small, and medium-sized enterprises (MSMEs) to make payments in a smooth, rapid, and secure manner. Marla Dukharan, a Trinidad and Tobago-based economist, stated at the recent event that the region requires innovative solutions to fulfil the needs of the poor and those involved in the informal economy. "With no reliable and efficient trade settlement system in place for these types of businesses, digital currency is a realistic option. Because the cost of transferring cash using traditional ways fluctuates between three and twenty-five percent of the amount of the funds being sent, digital currencies provide alternative possibilities for the impoverished in the region who rely on remittances to survive," she noted. Digital currencies, according to CTU Secretary General Rodney Taylor, can potentially strengthen the Caricom Single Market and Economy (CSME) push by improving financial inclusion in the region if they are regulated properly. Sharmyn Powell, chair of the Eastern Caribbean Central Bank's fintech group, spoke about the OECS' experience with digital currency. Powell stated that the roll-out of its DCash digital currency has been solving some recurring issues in the financial system, such as the high cost of payment methods and banking services and inadequacy of banking services in addressing the needs of unbanked customers; and other inefficiencies in the financial system. Late last year, the Carib$ initiative was developed, and it is planned to be expanded to other Caribbean countries. For instance, traders can now buy pineapples from Jamaica as a grocery in Barbados using the pan-Caribbean dollar instead of the typical back and forth and US dollar translations. "Use this one digital currency all around the Caribbean. It will allow seamless, faster, and cheaper payments, as well as liquidity and a fast track to CSME without the need to replace national currencies," stated Schöder. Furthermore, Schöder stated that they are currently in the process of establishing up a product and determining product-market fit.