SAN JUAN, Puerto Rico — The Eastern Caribbean has created its own form of digital currency meant to help speed transactions and serve people without bank accounts.
The Eastern Caribbean Central Bank said its “DCash” is the first such blockchain-based currency introduced by any of the world’s currency unions, though some individual nations have similar existing systems.
It became available Wednesday in four island nations under a yearlong pilot program: St. Lucia, Grenada, Antigua and Barbuda, and St. Kitts and Nevis.
“(It) is a milestone in the history of monetary instruments,” said Bitt CEO Brian Popelka during a press conference broadcast online.
The system allows users even without bank accounts — but with a smartphone — to use a downloaded app for payments.
Unlike cryptocurrencies, it is issued by an official central bank and has a fixed value, tied to the existing Eastern Caribbean dollar used across much of the region.
Officials said that by September at the latest, the digital currency will be available in Anguilla, Dominica, Montserrat and St. Vincent and the Grenadines, which form part of the eight island economies under the Eastern Caribbean Central Bank.
The project aims to see a 50% reduction in the use of physical cash by 2025, said Sharmyn Powell, chairperson of the bank’s fintech working group.
“It’s safer, faster and cheaper,” Powell said.
Central Bank Governor Timothy N.J. Antoine said he envisions farmers, fishermen, small business owners, single mothers and people without bank accounts, among others, using the digital currency.
“Payments are still too slow and too expensive,” Antoine said of the current system. “We heard you, and we have delivered.”
Antoine said it is harder to steal digital cash and said its a safe way to make payments while avoiding contact during the pandemic.
One Eastern Caribbean dollar is currently equivalent to 37 U.S. cents. All Eastern Caribbean notes feature Queen Elizabeth II of England as head of the Commonwealth.
The project comes more than two months after the European Central Bank, the Bank of Japan, the Bank of Canada, the Bank of England, the Swedish Riksbank and the Swiss National Bank created a group to study whether they should issue digital currencies.
The Swedish central bank already has commissioned a pilot program. Meanwhile, China rolled out a digital currency in four cities in April 2020 as part of a pilot program that has since expanded to more than two dozen cities.
DCash was created by Barbados-based fintech company Bitt in partnership with the central bank.