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Digital Currency in the Caribbean

Published date 2014-12-24
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From the summary of conclusions and recommendations:

It was noted that there is a need for better payment systems within the Caribbean region, and that the high costs and red-tape associated with providing electronic payment options are significant challenges to those wishing to establish e-commerce businesses in the region. The region also needs to lower the cost of remittance services. Digital currencies represent a potential option for improving services and reducing costs, but are challenged in receiving acceptance among consumers and regulators.

It was widely agreed that the facilitation of discussion between regulators and representatives of the digital currency industry represents an important opportunity for the exchange of ideas and concerns. This type of engagement is a valuable step in the eventual development of a viable framework for the regulation of digital currencies at a national level within the region. It was proposed that the creation of a regional interest group for the industry would be useful in providing a point of contact between industry representatives and regulators in the region.

The digital currency vendors present at the meeting expressed concern that the digital exchange of cryptocurrencies in user-to-user transactions should not be regulated, and indicated that doing so could prove to be prohibitively difficult at a technical level. However, it was broadly agreed that the exchange between digital currencies and national currencies represents a more feasible point at which regulation could be enforced, as is being proposed in the United States and Canada, for example. It remained undetermined whether this limited scope of regulation would leave sufficient room for regulators to meet their obligation to protect national interests in consumer protection, the enforcement of tax collection, and the prevention of money laundering and terrorist financing. It was pointed out that there are some self-regulating aspects to digital currencies that may be of service to regulators, in the development of administrative procedures and law enforcement practices to manage these concerns.

It was recognized that the participants in the digital currency industry can benefit from the timely establishment of national regulations, if only to make it clear what the rules are in terms of operating in various countries. Additionally, regulation can be valuable in terms of promoting public acceptance of these new payment technologies, by enforcing consumer protection measures that would encourage broader trust in these systems. There is also need to increase trust at an institutional level, for example, to establish credibility with banks who currently avoid doing business with digital currency and mobile money vendors, due to concerns that they may run afoul of anti-money laundering regulations.