The International Monetary Fund (IMF) has said the Eastern Caribbean should consider a common digital currency across the region to boost resources.
The ECCU region comprises of St Kitts and Nevis, St Lucia, Anguilla, Antigua, and Barbuda, Dominica, Grenada, and St Vincent and Grenadines. It is under the supervision of the Eastern Caribbean Central Bank (ECCB), which issues the Eastern Caribbean dollar.
IMF staff suggest that "cautiously piloting a digital currency" is one of the areas that could catalyse the region's resources and capacity, which would particularly help "solidify the monetary union by raising payment's efficiency."
It is vital at this juncture that we embrace the opportunity to expand our capacities for adaptation to the swiftly changing realities of the technological spheres in which we find ourselves in this 21st century"
St Kitts and Nevis is already developing favorable conditions for a Central Bank Digital Currency (CBDC) to be issued. The island is building a virtual currency-oriented legal framework and has already passed a Virtual Assets Bill, which requires companies to register and pass due diligence verifications if they want to operate in the virtual asset space.
This is in line with the anti-money laundering standards set by the Financial Action Task Force (FATF).
St Kitts and Nevis Finance minister Timothy Harris said during the bill's second and final reading in Parliament on January 23rd that the move addresses what the governor of the Eastern Caribbean Central Bank describes as a "cashless society."
Harris said that "it is vital at this juncture that we embrace the opportunity to expand our capacities for adaptation to the swiftly changing realities of the technological spheres in which we find ourselves in this 21st century."
According to the IMF, several central banks in different countries are considering implementing some form of Central Bank Digital Currency (CBDC). Uruguay has reportedly launched a CBDC pilot program already, while the Bahamas, China, Sweden and Ukraine are "on the verge" of testing their systems.