Dealing with currencies when you travel between islands has always been complicated in the Caribbean. With 7,000 islands comprising 12 dependent territories and 13 sovereign island nations, we have a lot of currencies floating around and, to aid with tourism, many businesses on a lot of islands also accept payment in currencies from other countries, especially the US dollar. This can make trading between islands and travel quite complex in terms of having the right money or making conversions when paying by card.
This is why Barbados based financial technology startup Bitt has identified a need for something quite ambitious – a connected cross settlement payment network to cover the whole of the Caribbean.
Blockchain and Cryptocurrency
You may already be familiar with the concepts of cryptocurrency and block chain technology, if you are aware of well known cryptocurrency Bitcoin and how it works.
Cryptocurrencies are real money you can spend and receive, and manage your account with, but they exist as a purely digital currency that isn’t tied to one country. This also means they are not as affected by socio-political and macroeconomic events as conventional currencies, which makes them an appealing prospect for some investors.
Blockchain technology means there is no central bank and so it makes a currency more democratic than one where banks are involved, and also cuts out the overheads involved.
As you might imagine, introducing something that uses blockchain and can be used to trade with all different countries without currency conversions would be a great improvement in the Caribbean for people who want to make payments on different islands.
How Much of a Challenge Is What Bitt Wants to Do?
While Bitt, especially since partnering with other block chain businesses like Californian company Netki, may well be able to create the technology to realize their vision of a cross-Caribbean blockchain based payment network, there are other challenges they will have to overcome, not least the legal challenges of implementing this in such a huge number of countries and ensuring everything is compliant with local banking and trading laws.
It is an ambitious project, but one that could really pay off both for the business themselves and for those of us who have been long lamenting the difficulties of cross-settlement payment where different currencies and economies are involved.
Barbados First to Get Digital Currency
While the full network across all the islands may be a while off, Bitt did announce in 2016 that Barbados would have its own digital currency using their block chain technology, developed in partnership with another block chain startup called Colu. This would be pegged to the existing Barbados dollar, but would offer more options and all of the benefits of block chain to Barbados residents.
If you live in the Caribbean, it may well be worth learning more about cryptocurrency, for instance how to trade Bitcoin, as with any luck this kind of technology will soon become important in this part of the world!