Barbados will be one of the first two Caribbean countries in which a digital currency is to be rolled out.
Officials say this digital currency will help to foster economic development and propel the Caribbean Community (CARICOM) Single Market and Economy (CSME), while enhancing financial inclusion in the region.
On Friday, Dr Jan Schröder, one of the principals behind the proposed digital currency, Carib Dollar (Carib$), said a lot of work has already gone into planning and a whitepaper had been developed.
Started last year, the CaribCoin project as it is being referred to is a joint venture between Schröder, the Chief System Architect, and the Caribbean-based technology accelerator Abed Ventures.
Schröder informed a webinar that Carib$ would first be rolled out in Barbados and Jamaica and then other Caribbean countries.
Pointing to some of the benefits of a digital currency, Schöder said it allowed for faster transactions and was more accessible, safe, sustainable and stable.
“There is an opportunity using digital money. Let’s think about creating pan-Caribbean digital money. So, if you want to buy pineapples as a grocer in Barbados from Jamaica, you just use this currency; you don’t have to exchange to US dollar from the Barbadian dollar and then back to the Jamaican dollar, just use this one digital money across the Caribbean. It would deliver seamless, faster and cheap payments, provide liquidity and enable fast-track towards CSME without a need to replace national currencies, which really is a hassle if you want to go that way,” said Schöder.
He explained that while the digital currency would be based on “good faith” like that of the fiat currency, its stability would also be backed by a basket of Caribbean digitised financial assets and commodities and it would be governed and pegged as defined by Caribbean public and private stakeholders.
“We propose using distributive ledger technology for a sense of safety,” he added.
“We are not just talking, we are building it. June 17, we will have a workshop with businesses to design the trade finance applications for this. This year, we will create an MVP [minimum variable product] with these solutions for trade finance and launch within two countries – Barbados and Jamaica – within six months from now. This is our plan to set this up.”
Schröder gave the assurance that officials associated with the project will look at the possibility of having the Carib$ work offline in the case of power outages, as he also assured that it will be safe against cyber-attacks
“We still have to set up the business plan, we are just in the phase of setting up a product and doing product-market fit at the moment,” Schöder said, adding that a part of the idea was to reduce the costs for regional trade.
According to the chief system architect, it would start with businesses before a “trickle down”, with the possibility of having salaries being paid using that digital currency. ([email protected]