The Caribbean region is embracing cryptocurrencies as a way of dealing with issues such as de-risking when banks pull out of the region in response to calls against money laundering by U.S. Cryptocurrencies could also help the unbanked in the region.
The Caribbean Tourism Organization is partnering with a local company CTO to use cryptocurrencies in improving payment processing in travel and tourism industry in the region. They aim at using cryptocurrencies to boost efficiency and cost-effectiveness in this industry.
Thus the memorandum of understanding between the two could see more people using cryptocurrencies and participating in the tourism economy and related sectors.
The move couldn’t be lesser than strategic because tourism is the largest single contributor to the Caribbean economy according to Bitt’s CEO Rawdon Adams. At the same time, the regional governments face certain challenges such as sluggish economic growth and high rates of debts for some time now. There is also a deficit of banking services in the region as large U.S. banks were withdrawing from the region. However, through their de-risking policies.
Besides, these governments have limited access to foreign exchange reserves due to accusations of supporting money laundering. Thus technology that can boost travel and tourism industry while helping face these challenges head-on is much welcome.
Additionally, since half of the Caribbean residents do not have a bank account. According to a 2015 World Bank report, cryptocurrencies could offer a better deal for them and the financial systems. Businesses affected by U.S. restrictions can also use cryptocurrencies to access the dollar-based foreign exchange reserves. At the same time, cryptocurrencies can help reduce foreign exchange costs while decreasing consumer costs and increasing profits for businesses.
A regional cryptocurrency
Further, eight governments and economies are supporting a move by the Eastern Caribbean Central Bank (ECCB). Since to issue a new cryptocurrency called Digital Eastern Caribbean Dollar (DXCD).
The bank signed a memorandum of understanding with the Bitt Inc for the project that intends to make banking more secure. They will work together for a pilot program that will address KYC (Know-Your-Customer), AML (Anti-Money-Laundering) and CTF (Combating the Financing of Terrorism) practices. The blockchain will help in data management, ensuring compliance, and monitoring transactions.
They hope that the pilot program will slow derisking in the region. However, which occurs when larger international banks pull out in response to labeling. Thus, by the U.S. as a hotbed of criminal financial activity.
The cryptocurrency for the blockchain will be used alongside the traditional EC fiat currency.
Even the government of Antigua and Barbuda will set up a cryptocurrency exchange to fund treasury.
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Image Source:- Caribbean