By Simons Chase
CJ Contributor
The Eastern Caribbean is home to one of the few examples of a regional monetary authority experimenting with blockchain technology.
This week, the Eastern Caribbean Central Bank (ECCB) announced a pilot project with Bitt Inc., a blockchain startup based in Barbados. The memorandum of understanding with the ECCB calls for testing Bitt’s technology to implement know-your-customer (KYC) and anti-money-laundering (AML) screening. KYC and AML are common regulatory requirements for banks or money transfer businesses.
According to Timothy N. J. Antoine, Governor of the ECCB, “This fintech pilot is part of the Bank’s Strategic Plan 2017-2021. The aim of the pilot is to ascertain the suitability of blockchain technology to help boost economic growth and competitiveness in the region consistent with the ECCB’s monetary and financial stability objectives. Furthermore, as the ECCB promotes the safety and soundness of the financial system in the ECCU, it also has a responsibility to encourage and support innovation consistent with the Bank’s mandate to facilitate the balanced growth and development of member countries. To that end, blockchain technology merits our attention and consideration at this time”.
ECCB member nations include Anguilla, Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Montserrat, St. Kitts and Nevis, Saint Lucia and St. Vincent and the Grenadines.
Blockchain is an emerging technology based on a distributed ledger or database.
The database is shared and supported by mutual participants whose concerted efforts are to maintain a communal decentralized digital bookkeeping system. The underlying data structure, called a blockchain, is stored in sequential blocks that are appended through a highly secure cryptographic process or proving mechanism.
To make those blocks reliable and secure, the “trustless” blockchain system appends data to a blockchain that cannot be altered by man or machine.
According to an excerpt from PayPal Crypto, Bitcoin is the original currency to use blockchain technology on a large scale. There has never been a breach of Bitcoin’s blockchain despite nearly a decade of existence.
Newer innovations in blockchain technology allow for more advanced features to be built into the blockchain, such as AML and KYC mentioned above.
The promise for implementing blockchain technology in a regional monetary system is to reduce cost and time in money transfers.
In 2016, Bitt, Inc raised $16 million in venture financing from Medici Ventures, an arm of Overstock.com, a publicly-traded U.S. ecommerce company.