The Eastern Caribbean Central Bank (ECCB) and Bitt Inc. a fintech company based in Barbados has signed a Memorandum of Understanding (MoU) to administer a blockchain technology pilot in the ECCB member countries to ease and secure banking practices even more.
During the pilot, ECCB and Bitt Inc. will be working together to make and test technology which is intended to address Anti-Money-Laundering (AML), Know-Your-Customer (KYC), as well as Combating the Financing of Terrorism (CFT) practices within the member nations of the central bank.
Secure platform for virtual payments
The member nations comprise of Anguilla, Antigua and Barbuda, Grenada, the Commonwealth of Dominica, Montserrat, St. Kitts and Nevis, Saint Lucia and St. Vincent as well as the Grenadines.
Going by Finextra reports, the two firms will be using blockchain technology for data management, thus ensuring compliance, at the same time, to monitor transactions.
This pilot is intended to develop a secure and globally compliant platform for virtual payments and settlements. Finextra also stated that ECCB and Bitt are working together to issue an Eastern Caribbean virtual currency to be used alongside the traditional EC fiat currency. Controlled testing of the Pilot is set to happen later in the year.
A press release stated that the pilot will be restricted to controlled environments and supervised by the bank. The outcome could be used in developing more efficient systems for virtual payment and settlement. It may also be useful in issuing a digital currency for the region.
Addressing de-risking of the region
ECCB hopes the pilot will relax the trend of ?de-risking? within the area. De-risking takes place when larger international banks withdraw from the area in reaction to U.S. statement labeling the Caribbean a breeding ground for criminal financial activity. This exercise caused a shortage in USD reserves and had consequently taken a heavy toll on regional trade.
Concerning how long the pilot will take, as well as when the results would be available, the information is not available.
Nevertheless, a press release noted that any virtual currency issued would possibly be used along with the existing fiat currency used in the region.
Bitt has previously worked with Netki, a U.S. blockchain startup in developing a payment network in Barbados. They also established a digitized version of the Barbadian dollar.
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