Why the ‘Blockchain Bank’ could be a game changer for Barbadian businesses

In the bustling landscape of Barbadian commerce, from the artisan workshops in Pelican Village to the tech start-ups in Warrens, a crucial conversation is growing louder. It is not just about how we make money, but how we keep it, grow it, and protect it from the eroding tides of inflation. This past week, the Small Business Association (SBA) of Barbados held a pivotal Members’ Information Session that challenged the very foundations of how we view our business finances.

 

Guest speaker, Mr Hallam Hope, a renowned blockchain and cryptocurrency researcher and educator, discussed a concept that sounds futuristic but is rooted in the oldest principle of business: financial sovereignty. The topic was “Introducing the Blockchain Bank – A Game Changer in Access to Finance.”

 

The session commenced with a provocative question: Is money an asset or a liability?

 

Traditionally, we are taught that cash is king, an asset to be hoarded. However, the economic reality paints a starkly different picture. During the session, it was highlighted that since the US dollar, to which our Barbadian dollar is pegged, fully decoupled from gold in 1971, its purchasing power has declined by well over 85 per cent due to inflation.

 

For a small business owner, this is devastating. It means the retained earnings sitting in a low-interest savings account are not just stagnant; they are actively decaying in value. With the cost of living rising and the effective tax burden on the middle class estimated at around 32.8 per cent, the traditional model of “save, save, save” in a standard fiat account is no longer a guaranteed path to wealth preservation, let alone creation. We are effectively running up a down escalator.

 

Enter the Blockchain Bank

So, what is the alternative? The webinar introduced the concept of the “Blockchain Bank.”

 

Unlike the brick-and-mortar institutions, a Blockchain Bank is not a building on Broad Street. It is a concept of self-custody using blockchain technology. It involves moving funds from the traditional banking system, where you are essentially lending your money to the bank for negligible returns, onto a secure, immutable ledger where you control the keys.

 

The premise is simple yet revolutionary: by utilising hardware wallets and secure blockchain ledgers, businesses can cut out the middleman. Mr. Hope illustrated this by contrasting a traditional leather wallet with a hardware wallet. This device allows you to hold digital assets like Bitcoin or stablecoins securely.

 

Critics often dismiss blockchain as speculative gambling. However, the session provided irrefutable data that the “smart money” has already made its move. There is a massive institutional shift.

 

Major global financial players like BlackRock and Fidelity, firms that manage trillions of dollars — have entered the space aggressively. Their US-listed Bitcoin Exchange Traded Funds (ETFs) collectively hold well over $80 billion in assets under management.

 

Furthermore, global banking giant JP Morgan now moves between $10 and $11 trillion a day, using its own private blockchain technology to facilitate speed and reduce costs. If the largest banks in the world are adopting this technology to improve their efficiency, why should Barbadian businesses remain tethered to outdated systems?

 

A Caribbean imperative: Lessons from regional digital currencies

For the Caribbean, the embrace of blockchain is not just about personal investment; it is about regional resilience and the failure of traditional systems to serve MSMEs. We are a region constantly threatened by de-risking, where international correspondent banks sever ties, choking the lifeblood of cross-border trade.

 

The Caribbean has already taken a lead in exploring digital currency solutions. The Eastern Caribbean Currency Union (ECCU) launched DCash, The Bahamas pioneered the Sand Dollar, and Jamaica introduced JAM-DEX. These Central Bank Digital Currencies (CBDCs) are powered by Distributed Ledger Technology (DLT), the same foundation as blockchain, and were specifically designed to increase financial inclusion and modernise payments for local populations, including MSMEs.

 

While these initiatives are groundbreaking, their adoption by the small business community highlights both the opportunity and the challenge. The ECCB’s DCash pilot, for instance, closed recently, having onboarded over 400 businesses across eight territories. Similarly, The Bahamas’ Sand Dollar had around 1 500 merchant wallets (small businesses) by September 2023. These figures demonstrate that while the formal, regulatory-driven DLT is operational, adoption has been slow, highlighting the challenge of convincing merchants and consumers of the demonstrable added value of the technology over cash or card payments.

 

This push for digital adoption is already showing rewards. In a recent Mastercard survey, 91 per cent of Jamaican MSMEs that adopted digital payments reported significant growth, with 88 per cent reporting time and cost savings. These are the exact productivity gains that the decentralised finance movement promises, but at a far greater scale and lower cost. The lesson from our neighbours is clear: the demand for a digital, efficient financial system exists, and blockchain, in its various forms, is a solution.

 

The prerequisite: Education over speculation

However, a word of caution is necessary, and it was a point stressed repeatedly during the webinar. This is not a get-rich-quick scheme. The volatility of these markets is real, as evidenced by the data reviewed during the session, showing exponential growth accompanied by significant dips.

 

The key to success is education. Mr. Hope warned against the “blessing circles” and schemes where you hand your money to others to manage. The philosophy of the Blockchain Bank is self-sovereignty: “You do not have to trust anybody”. You must own the keys, and you must understand the technology.

 

This requires a commitment to learning, setting aside time weekly to understand market cycles, security protocols (like 2-Factor authentication), and the difference between “hot wallets” (connected to the internet) and “cold storage” (offline and secure). It requires the patience and discipline to manage long-term investments, much like the commitment required to run a successful small business.