Eastern Caribbean Central Bank expanded its CBDC (DCash), to include two additional commonwealth nations: Montserrat and Dominica. The digital version has been made available in seven of the eight ECCU members.
The Eastern Caribbean dollar (EC$) is the currency used by the members of the Organisation of Eastern Caribbean States (OECS), and a central bank’s pilot project rolled out the DCash as a digital version of the currency that can be sent and received through a free app for users based in any eastern Caribbean country that has launched the CBDC. Transactions are free during the pilot period.
The ECCB Governor Timothy N.J. Antoine expressed that “the payment system should work for all, except for illicit actors,” and DCash “must work for small states and small businesses”. Antoine justified the existence of an Eastern Caribbean CBDC as an advance in the digitalization of the economy while noting that the current payment methods are “too slow and too expensive”.
Users do not need a bank account to access or use the digital currency as the bank claims its top goals are “payments system efficiency, financial inclusion of the unbanked and underbanked populations, and increased resilience and competitiveness in the ECCU.”
Each of these objectives is aimed at increasing economic growth. However, they also aim at propelling our agenda to socioeconomic transform for the common prosperity of all citizens in our Currency Union. … we believe that to do that, we have to transform the region, and DCash is an important instrument in what is really the bigger conversation about the buildout of a digital economy for our Currency Union,
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CBDCs in the Caribbean: How Can They Benefit?
Besides the geographical issues on cross-border payments that Eastern Caribbean islands have faced for years, LatAm and the Caribbean are the world’s second region most prone to natural disasters, a study shows. In some cases, the damage has reached a 90% equivalent of a few countries’ PIB.
Hurricanes and floods can rule over almost half of the Caribbean’s year and most of these nations have a limited capability of dealing with the situation. They are now more at risk due to climate change and COVID.
These events have many social and economic implications. One is the fact that in the aftermath of a natural catastrophe, there are important parts of society that can’t access banks for money. This makes them more vulnerable.
Enthusiasts have claimed that CBDCs like The Bahama’s sand dollar and the ECCB’s Dcash could offer a viable solution by making money more accessible as soon as users can enter the platforms during periods of crisis, thus delivering financial help packages faster.
Many smaller countries are now more dependent on digitalization. DCash was the first currency alliance to adopt a CBDC. It aims to decrease 50% the amount of cash used by people in 2025. The ongoing twelve-month pilot started in March of 2021 and is expected to “assess the feasibility of a full commercial launch to all eight of their member countries”.
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