BRIDGETOWN, Barbados, Friday August 17, 2018 – Barbados-based fintech company Bitt Inc. has signed a Memorandum of Understanding (MOU) with the Central Bank of Curaçao and Sint Maarten (CBCS) to look into the possibility of issuing a digital currency for the two Dutch-Caribbean nations.
Medici Ventures, under whose portfolio Bitt falls, announced this week that the deal had been signed earlier this month at the culmination of talks that began in April 2018 during the CBCS’ second Central Banking Conference. The MOU solidifies the relationship between Bitt and the CBCS and outlines the basic framework for this collaborative effort in order to determine the way forward, it said..
“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,” explained Rawdon Adams, CEO of Bitt Inc.
Leila Matroos-Lasten, acting President of the CBCS, said that given that two of the CBCS’ most important objectives are to maintain the external stability of the guilder, and to promote the efficient functioning of the financial system in the countries of Curaçao and Sint Maarten, the MOU is of particular relevance.
“The Central Bank is determined to address its challenges proactively by exploring the latest technology available, for example, to reduce the level of cash usage within the monetary union, and to facilitate more secure, more AML and KYC compliant, and more efficient financial transactions within and between Curaçao and Sint Maarten,” she said.
“The CBCS herewith recognizes 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 (fintech) solutions. This would be beneficial to everyone.”
The MOU with the CBCS marks Bitt’s second MOU with a formal monetary union, the first being with the Eastern Caribbean Currency Union (ECCU) which was signed earlier this year.
There are approximately seven formal currency/monetary unions in existence globally, inclusive of these two in the Caribbean.
“We chose to sign this MOU with Bitt due to this company’s regional experience in digital payments and its macroeconomic views,” said Matroos-Lasten.
Adams said a Central Bank issued digital currency is of particular relevance in a monetary union where member states are separated by long distances – or the ocean – as with the ECCU, and the situation of Curacao and Sint Maarten.
“This makes the Central Bank’s task of printing and distributing physical cash securely across member states that much more challenging and costly. 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. This solution is particularly powerful in the case of cross-border transactions, which can take days even within a monetary union, and the cost of which is only increasing,” he said.
Bitt’s vision, as the region’s premier financial technology company, has been to utilize distributed ledger technology to efficiently and securely issue digital dollars that equate with existing fiat currency, under regulatory oversight.
“We are therefore pleased to sign this MOU with the CBCS, and look forward to the collaboration and results,” added Adams.