By: Staff Writer
October 7, 2022
The Bahamas and the Eastern Caribbean states have been hailed as “pioneers and world leaders” in Fin-Tech sector says Commonwealth Secretariat.
The Secretariat in a research report, “Commonwealth Countries: Driving FinTech Innovation,” said that The Bahamas and the Eastern Caribbean are at the forefront of the digital currency and FinTech revolution.
Both have implemented digital versions of their country’s currency, with The Bahamas being the first in the world to adopt a digital version of the country’s currency called the Sand Dollar and the Eastern Caribbean following suit with the launch of their DCash.
The Bahamas has gone even further and has enacted the Digital Assets and Registered Exchanges (DARE) Act to regulated cryptocurrencies and cryptocurrency exchanged world wide. Since it was enacted, the country has attracted the largest crypto exchange in the world, FTX. “In the Caribbean, crypto ownership rates are low, averaging around 1 per cent. Notwithstanding these figures, crypto is set to grow in the region. In September 2021, FTX, the world’s third largest cryptocurrency exchange, relocated from Hong Kong to The Bahamas – citing The Bahamas’ proactive stance on cryptocurrency regulation as the primary driver behind the move,” The report also said: “However, the growth and use of FinTech is not homogenous across the world. FinTech applications that are popular in East Africa are different from those more common in the Caribbean.”
East Africans have been sending money via their mobile devices for nearly half of decade now with multiple vendors in the space for digital wallets while the Caribbean has focused more on institutional strengthening with their governments deciding to be a player in the market instead.
The report also said, “Compared to the rest of the world, the Caribbean has not been at the forefront of payment innovation, despite a high mobile penetration rate and access to technology. As a result, retail payment services continue to be costly and inefficient, which further limits access to digital payments for a large part of the region. Interoperability across systems in the region is also limited. The Latin America and Caribbean region has one of the lowest interoperability rates in the world at 10 per cent, compared to 75 per cent in Asian emerging market economies and 25 per cent of sub-Saharan Africa. The lower interoperability is reinforced by the use of digital wallets. Although digital payments and transactions are on the rise, cash is still ‘king’ in the Caribbean.”
A lot of people in the Caribbean are “un-banked,” never had a bank account much less a client card for the automated teller and if they do, they don’t have debit card operability. Also, many Caribbean citizens prefer to operate in the informal sector where there is no need for credit/debit card facilities let alone digital currency solutions.
It added: “Across the Caribbean, a significant segment of the population who had not yet joined the growing global migration to digital financial services were caught off-guard by sudden branch closures due to COVID-19 and found themselves unable to access vital services – including cash withdrawals that they normally carried out face-to-face. In response, several countries, such as Barbados, have introduced new payments legislation in order to take the first steps towards eventually introducing digital banks.”