ECCB Says Blockchain Could Solve Caribbean De-Risking Crisis
by Mike Godfrey, Lowtax.net, Washington
27 November, 2017
The Director of the Eastern Caribbean Central Bank, Christopher Louard, recently said blockchain technology may provide a possible solution to the region's "derisking" challenges.
Derisking describes the decision being taken by international banks to cease relationships with banks considered to be higher risk. This has impacted Caribbean banks' correspondent banking relationships, which has reportedly impacted trade in the region and hindered cross-border transfers.
Derisking has come as a response to concerns from international banks over money laundering risks and rising compliance costs, which have become more acute as a result of international regulators greatly strengthening regulation.
Speaking at the recent annual conference of the Caribbean Regional Compliance Association, he told delegates that a regional digital payment system based on blockchain technology could turn the tide on derisking.
He predicted the use of this new technology would effectively lead to the digitalization of countries' fiat currencies through the creation of a regional digital currency and a multilateral clearing system built on a distributed ledger or blockchain technology.
The Eastern Caribbean Central Bank is the monetary authority for a group of eight island economies - Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines.
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