Eastern Caribbean Central Bank (ECCB) to Trial Blockchain-based CBDC Cryptocurrency as Legal Money
The Eastern Caribbean Central Bank (ECCB) https://www.eccb-centralbank.org, the central bank for the Eastern Caribbean dollar, has announced its set to launch a pilot for a distributed ledger technology (DLT) powered central bank digital currency and could proceed to adopt it as a legal tender in 2020 if all goes as planned, according to reports on March 6, 2019.
Eastern Caribbean Apex Bank Joins the Blockchain Bandwagon
Following its successful partnership with Bitt Platform https://www.bitt.com, a Barbados-based fintech firm that facilitates online money transfers for individuals and institutions, the ECCB is now set to trial a CBDC that could become legal tender by next year.
“Bitt is pleased to be the official FinTech partner for the central bank digital currency (CBDC) pilot for the Eastern Caribbean Central Bank,” declared Bitt on its website.
Specifically, the team is looking to securely mint, issue and distribute a digital version of the Eastern Caribbean dollar (XCD) and all financial institutions across the Eastern Caribbean Currency Union (ECCU) will be required to integrate the token into their operations during the pilot testing.
DXCD Stablecoin Designed to Support a vast array of Transactions
Interestingly, the ECCB has reportedly made it clear that the stablecoin, which is named DXCD, will stand at 1:1 with the region’s official banknotes and will be used to facilitate various financial transactions, including payments between consumers and merchants, as well as peer-to-peer transactions such as money transfers between people in the Eastern Caribbean Currency Union (ECCU).
Residents will be able to make payments with the stablecoin via their smartphones and other devices.
Commenting on the development, the governor of the ECCB, Timothy N.J Anthoine stated explicitly that the CBDC initiative must not be seen as an academic exercise but an essential project that would write down the name of the ECCB as the world’s first central bank to launch a DLT-based CBDC.
In his words:
“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.”
DLT Going Mainstream
The DXCD pilot is part of the ECCB’s plan (from 2017-2021) to make the region more cashless by reducing the use of fiat currency by at least 50 percent, stabilize the region’s economy and promote overall development of ECCU member nations.
The project is scheduled to kick off this month and would run for about one year. If the development and testing phases go smoothly, the ECCB says it would roll out and implement the stablecoin in pilot countries for six months, while also conducting public enlightenment campaigns to boost civic engagement with DXCD.
Though nascent and yet to be entirely regulated, it’s worth noting that blockchain technology is slowly gaining grounds across the globe, especially in the financial sector.
In 2017, Venezuela became the first sovereign nation to officially launch and integrate own cryptocurrency, the petro into its economy, in a bid to overcome the prolonged economic crisis and international sanctions it’s going through.