Eastern Caribbean Central Bank to Test Blockchain Legal Tender

The Eastern Caribbean Central Bank (ECCB) is about to conduct a pilot for a blockchain-based central bank digital currency (CBDC) in preparation for its planned full rollout as a legal tender, possibly in 2020.

For the initiative, the ECCB late last month inked a deal with Barbados-based fintech firm Bitt to help conduct the pilot, with other technical support from Pinaka Consulting.

This CBDC pilot will involve a “securely minted and issued” digital version of the Eastern Caribbean dollar (XCD) and will be distributed for use by financial institutions across the Eastern Caribbean Currency Union (ECCU), according to an announcement from Bitt.

The stablecoin, DXCD, is intended for use in financial transactions between consumers and merchants and peer-to-peer transactions such as sending money to friends or family within the ECCU. Funds will be able to be sent using devices such as smartphones.

The governor of the ECCB, Timothy N. J. Antoine, stressed that the pilot is not an “academic exercise.”

He explained:

“Not only will the digital EC Dollar be the world’s first digital legal tender currency to be issued by a central bank on blockchain but this pilot is also a live CBDC deployment with a view to an eventual phased public rollout.”

The pilot comes as part of the ECCB’s strategic plan for 2017-2021, which aims to reduce the use of cash in the union by 50 per cent, as well as bring more stability to the financial sector and boost development of ECCU member countries, Antoine said.

“It would be a game-changer for the way we do business,” he added.

The pilot is launching this month and, after roughly 12 months of development and testing, will be followed by rollout and implementation in pilot countries for about six months. The ECCB will also launch educational initiatives to raise public engagement with DXCD across the union.

Bitt CEO Rawdon Adams commented that the project aims to “enhance economic growth and the quality of life of ordinary people.”

ECCB image via Shutterstock