The Eastern Caribbean Central Bank (ECCB), located in the country of Saint Christopher (St. Kitts) and Nevis, publicly went live with its central bank digital currency (CBDC) DCash on Wednesday.
Countries such as Russia, China, and Japan have been testing a central bank digital currency (CBDC) as part of a wider arc of development, as previously reported and explored in a past research report from The Block on the subject. Until today, only one central bank has gone live with a CBDC, the Central Bank of the Bahamas’ Sand Dollar.
The head of the Bank of International Settlements said Wednesday that if implemented correctly, CBDCs could help reduce “long-standing” issues in the payments sector.
The launch of the ECCB’s DCash is notable because it’s the first example of a central bank within a currency union to go live with a CBDC. A currency union is an agreement between two or more countries to maintain the same currency or to keep their currency prices similar. The Eastern Caribbean Currency Union (ECCU) comprises eight nations in the Caribbean, but DCash will only be available for use in four of them: St. Kitts and Nevis, Antigua and Barbuda, Grenada, and Saint Lucia.
The ECCB partnered with fintech firm Bitt to manage the infrastructure and operation of DCash. The CBDC can be used for consumer, e-commerce, business-to-business, and internal cash management with the DCash Merchant App.
“The ECCB has been working in partnership with Bitt Inc for over two years to develop this digital version of the EC currency in an effort to increase financial inclusion, competitiveness and resilience for the people of the Eastern Caribbean Currency Union,” the central bank said in a statement published last week.
During the next year, ECCB and Bitt plan to integrate DCash into the financial systems of the four pilot countries, in addition to incorporating the other four ECCU members into the DCash ecosystem.