Fintech group to explore central bank-issued digital currency

August 14, 2018
Chris Wheal

Barbados fintech group Bitt has signed a memorandum of understanding (MOU) with the Central Bank of Curacao and Sint Maarten to explore the potential issuance of a digital guilder.

Physical cash is costly and challenging to distribute between the Caribbean islands

Bitt, a start-up in the portfolio of Venture Capital group Medici Ventures, which itself is a subsidiary of e-commerce giant Overstock.com, is researching a digital currency for use in central bank financial payments.

The Central Bank of Curacao and Sint Maarten is the monetary authority of two Dutch crown dependencies in the Caribbean islands that form part of the Netherlands Antilles.

Digital guilder

While the MOU was signed in early August, the announcement was published in a press release dated 13 August.

Rawdon Adams, chief executive of Bitt, explained that a central bank-issued digital currency was particularly relevant in a monetary union such as that between the islands of Curacao and Sint Maarten.

The islands are separated by a long distance in the Caribbean Sea and this makes the central bank’s task of printing and distributing physical cash more challenging and costly. Indeed, cross border transactions, even within a monetary union, can take days and cost much more than domestic transactions.

“A central bank issued digital currency, which can be used on mobile wallets, facilitates secure and frictionless financial transactions and payments, using a mobile phone/tablet, within each jurisdiction and across jurisdictions in the monetary union,” Adams added.

Cross-jurisdictional transactions

The central bank’s most important objective is to maintain the stability of the guilder and promote the efficient functioning of the financial systems on the two islands.

Leila Matroos-Lasten, acting president of the central bank, said: “The central bank recognises the transformative potential of innovation and technology and is committed to exploring solutions regarding efficiency of cross-jurisdictional transactions and digital payments whilst ensuring compliance and security assurances obtained by these state-of-the-art solutions.

Adams added: “The MOU clears the way for collaboration and information sharing regarding a feasibility study, designed to determine the viability and functionality of using a central bank-issued digital guilder within the financial ecosystems of each member, and across both members of the monetary union,” Adams added.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

Related News

OL DEX is closing all activities April 25, 2020
USDT (ERC-20) Gateway Enabled April 17, 2020