Digital currency hailed as payment alternative for SMBs and the unbanked

By the end of the year, Barbados and Jamaica will become the first Caribbean territories to access a new pan-Caribbean digital payment settlement system, called CaribDollar (Carib$).

Carib$, a stablecoin, is the creation of partners Abed Ventures Inc, from Barbados, and German entrepreneur, Dr. Jan Schröder.

The introduction of digital currency in the region was announced during the Caribbean Telecommunications Union (CTU) webinar, Demystifying Cryptocurrency and Digital Cash in the Caribbean held virtually, June 3, 2022.

The chief system architect of CaribCoin Inc, Dr. Jan Schröder, explained that a stablecoin is a kind of cryptocurrency – whose value is pegged to legal tender like the US dollar and/or other commodities like gold or oil.

Introducing Carib$, he said it would be backed by Caribbean assets. Dr. Schröder further explained that the cryptocurrency “will allow the settlement of accounts between merchants or sellers doing business in different Caribbean territories (cross-border) in the legal currency of each party’s home country without the use of intermediaries. such as banks, using an online account platform to transfer electronic funds.

Carib$ will also provide a solution for the many unbanked small merchants and small medium and micro enterprises (SMEs) to make payments seamlessly and instantly, as well as securely and privately.

Mr. Rodney Taylor, CTU General Secretary, said, “With the right regulatory framework, digital currencies have the potential to deepen the push for the Caribbean Community Single Market and Economy (CSME).

Economist Marla Dukharan said, “The region needs innovative solutions to meet the needs of the poor and those operating in the informal economy, such as hawkers and other small traders.”

She said that in the absence of an effective trade settlement system for SMEs, digital currency offers a viable alternative.

Dukharan continued, “Digital currencies also provide additional options for the poor in the region who depend on remittances to survive, since the cost of transfer through traditional means varies between 3 and 25% of the value of the funds transferred.

Sharmyn Powell, Chair of FinTech Group, Eastern Caribbean Central Bank, shared the experience of the Organization of Eastern Caribbean States with digital currency.

She said: “The Central Bank has sought to address some recurring issues in its financial system with its new digital currency, DCash, namely the high cost of current payment methods and banking services; insufficient banking services to meet the needs of unbanked customers; and inefficiencies in the financial management systems of small, unbanked traders, which could slow the pace of trade.

Vashti Maharaj, Advisor, Digital Trade Policy at Oceans and Natural Resources Trade at the Commonwealth Secretariat offered another perspective.

Maharaj said: “Cultural barriers, such as resistance to change and limitations in financial literacy or digital skills, will require a focus on public awareness, education and capacity building to promote rapid adoption of new technologies.

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