BASSETERRE, St.Kitts (Thursday 25th July 2019) – The Eastern Caribbean Central Bank (ECCB) is presently focused on carrying out a blockchain technology exercise geared towards testing the digital version of the EC dollar within financial companies on a regional scale including the Federation of St.Kitts and Nevis.
At an informational teleconference held on Friday 19th July at the bank’s headquarters in Bird Rock, media workers from around the region were engaged on the topic of the bank’s Digital Currency Pilot Project. The venture is currently in its fifth month of a development and exploration phase before moving on to the course of the next 18 months.
ECCB Governor Timothy Antoine talked about the project as part of the bank’s strategic planning as he pointed out that a lot of what is being done at the bank is about transformation.
“…modernisation, innovation for transformation, and that is our relentless pursuit. We want to see transformed economies, and I make this point because we want to put into context everything that we do…A lot of what we do here is focused on how we transform the region.”
According to the top ECCB official: “As we speak, there are several are several central banks around the world which are now seriously considering central bank digital currencies, and I want from the outset to make it very clear we are not here speaking about crypto currencies; they are very different, and we need to be clear about that. What we are speaking of is currency issued by the Eastern Caribbean Central Bank in the very same way that we issue our current polymer notes at this time; one is physical [and] the digital is digital-they’re both cash.”
He added: “This is very important distinction that has to be made because a lot of the discussions around digital currencies have been around Bitcoin for example… Litecoin, Ripple among others but they have issues, and I think one of the reasons why central banks are getting very involved in this phase is because they recognize the real benefits to be had from the digital currency; on the payment side-efficient payment …financial inclusion, reducing the use of physical cash and those are our main motivation but they’re also real concerns about crypto currencies as they currently exist; they’re unregulated, they are not issued by a central bank, their value fluctuates and people could get hurt and have gotten hurt so while it is true that some people have made quite a bit of money from say Bitcoin, it is also true that some people have also lost a lot of money ,and we have had an occasion to issue two advisories I believe in the last year or so cautioning the public to be very careful way about the use of crypto currency.”
“We have gone beyond cautioning to take a proactive stance where we lean in and look at the technology; in this case blockchain and determine whether and to what extent it can be used by us at the ECCB for our currency union,” Antoine also noted.
Research Officer of the Strategic Planning and Projects Department Kieran St. Omer shared that with blockchain technology, one of the key benefits is data handling and trust.
According to her, it helps in intermediation and can provide high value opportunities in retail banking. She also touched on fraud prevention and risk scoring of customers as it relates to maintaining integrity.
As gathered, the project will be mainly deployed in at least four pilot countries- Antigua and Barbuda, Grenada, St.Lucia and also St.Kitts and Nevis.
“…and those selections were made based on interest from financial institutions within the region as well as we’ll be deploying the actual use of the digital currency over a six month period in a controlled live environment . So currently we’re in the fifth month of the development and exploration phase where we’ve been having several stakeholder engagements-bilateral engagements- to not only external conferences but we’ve been meeting with our stakeholders and ecosystem partners namely the financial institutions-banks, credit unions and other financial regulators throughout the last five months to educate them and for us to find out what would be their key requirements for using such digital currency. So, it’s a very important learning exercise for us at the ECCB.”
St. Omer said the key objectives “are really to create value in banking, protecting our customer data and convenience outcome compliance solutions is another major objective for us within the ECCU.”
She also shared that the Digital EC Pilot project focuses on three key components “where we’ll be focusing on the minting and issuance of issue of highly secured digital currency. Like as it is right now in terms of the paper base- or notes and coins- the ECCB is the sole authority in terms of the issuance of currency and that will remain in terms of us issuing that digital currency…payments and transfers within the ECCU territories, be it domestic or regional payments and transfers so persons will be able to get involve in real time payment processing…”
In strengthening the ECCB Governor’s point about the type of currency, she said: “It is not a crypto currency, it is not a private token that involves any mining. It’s a legal tender, a digital version of our EC dollar that we use every day so it’s just another form of our cash currency.”