The Eastern Caribbean Central Bank (ECCB) plans to launch a digital currency in 2020, even as it is focused on the “existential threat” of climate change, according to bank governor Timothy Antoine.
Mr Antoine, who has been in post since February 2016, champions the region’s fiscal stability as a lure for foreign investors; its exchange rate has been fixed for the past 43 years. “The ECCB, by virtue of being the single central bank for eight countries with a fixed exchange rate regime, offers a very powerful construct from an investor point of view. We have no foreign exchange controls or capital controls, so if you invest you can repatriate profits without any difficulties,” adds Mr Antoine, a native of Grenada.
Formed in 1983, the ECCB is the monetary authority for a group of eight island economies strung out like a necklace across the Caribbean Sea: Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines.
The ECCB is projecting regional growth of between 3% and 3.5% for 2020, similar to that of 2019, and largely coming on the back of the performance of its tourism and construction sectors. But it is the launch of its digital currency – the first of its kind in the region – that is capturing widespread attention. The blockchain-backed system is scheduled to go live in Antigua and Barbuda, St Kitts and Nevis, St Lucia and Grenada in March or April following a large-scale public awareness campaign, with the remaining economies set to follow thereafter.
The currency, which seeks to bypass the logistical hurdles of moving paper currency between disparate locations, will be used by banks, credit unions and approved mobile providers as well as utility companies, supermarkets and other high-volume vendors.
The project has “really generated significant interest both within our region and outside” since it was announced in March 2019, according to Mr Antoine. “The issuance of a digital currency represents an opportunity for the region to make a quantum leap in terms of how we make our payments. That is a very exciting project. It is demanding, but we feel the promise it offers our region is enormous,” he adds.
Climate change threat
Looking around a region that has been devastated by natural disasters in recent years, with the growth of storms in frequency and intensity linked by most scientists to climate change, Mr Antoine is also trying to get the area the help it needs. In 2017, Dominica was savaged by Hurricane Maria (along with Puerto Rico and the US Virgin Islands), and that same year Barbuda was temporarily depopulated after being hit by Hurricane Irma, which also battered Anguilla and other nearby non-ECCB islands such as Saint Barthélemy and Saint Martin.
“We see climate change as an existential threat,” says Mr Antoine. “We believe [the global community] needs to cap emissions at 1.5 degrees Celsius – '1.5 to stay alive' – and the reality is right now we are not on track. There is a big concern in our region about the lack of climate action, but also about the lack of resources to assist us with adaptation to climate change. Even though the Caribbean is among the lowest emitters, we are [among] the hardest hit.”
He believes that while many ECCB member countries are classed as middle to high income, they should qualify for concessionary financing to help make their infrastructure more resilient in the face of the growing threat from climate change.