American vacationers flock every year to the scenic islands of the Caribbean, and some day they might be using a digital version of the East Caribbean dollar to pay for a Rum Punch or Ting With a Sting.
The Eastern Caribbean Central Bank, the monetary authority for the eight-country Eastern Caribbean Currency Union, announced this week that it will test a blockchain-based version of the East Caribbean dollar, dubbed DXCD, accessed through a mobile app. The bank’s technology partner for the experiment is Bitt Inc., a Barbados-based portfolio company of Medici Ventures, the blockchain investment subsidiary of Midvale, Utah-based e-commerce retailer Overstock.com Inc.
While a handful of other countries have tested or are testing digital versions of their currency, most notably Sweden and Uruguay, backers say the digital East Caribbean dollar will become the world’s first official currency to use blockchain technology. The digital currency will be usable for payments at merchant locations as well as person-to-person payments. The bank and Bitt say it will reduce cash usage and bring more consumers in a part of the world with a large unbanked population into the financial mainstream.
While announced Wednesday, Bitt and the central bank, which is based in Basseterre, Saint Kitts and Nevis, signed their agreement Feb. 21. The pilot project has already begun, but participating countries have yet to be named, Simon Chantry, Bitt’s chief business-development officer, tells Digital Transactions News by email. The first phase, he says, involves a year of development and testing at the central bank in Saint Kitts, then making the protocol available in three countries.
“I suspect within the coming months we will have a firm decision on participating member countries as a number of them have already indicated their interest,” Chantry says.
Besides Saint Kitts and Nevis, the currency union’s member countries are Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, Saint Lucia, and Saint Vincent and the Grenadines. They have a total population of about 630,000.
Bitt offers a mobile wallet for consumers and digital-payment services for merchants. Chantry says both Bitt and the Eastern Caribbean Central Bank have been talking with merchants on the islands about the venture. “The responses indicate substantial interest for participation in the DXCD project,” he says.
Costs for accepting the digital currency haven’t been disclosed yet.