Caribbean Travel Embraces Cryptocurrencies

Cryptocurrency’s adaptability to clandestine and sometimes criminal transactions has cast a layer of suspicion over Internet-driven digital currencies transactions. Some analysts describe the technology behind Internet-based currencies as “immature.”

Yet even once-skeptical observers now say cryptocurriences, backed by blockchain technology (electronic architecture supporters say ensures users’ security and anonymity), can also aid travel suppliers by reducing global payment transaction times from weeks to hours.

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Meanwhile Caribbean governments, along with regional public and private sector organizations, are exploring cryptocurrencies like Bitcoin in large part to address the region’s laggard economic growth, high debt levels and dwindling access to U.S. banks.

The Caribbean Tourism Organization (CTO) is the latest regional institution to embrace cryptocurrency, announcing this week a pact with blockchain technology company Bitt Inc. designed to facilitate “the implementation of more efficient payment processes for tourism-related products and services,” said CTO officials in a statement.

The groups announced a memorandum of understanding under which Bitt’s digital wallet and merchant applications “will be promoted to help foster broader economic participation in community-based tourism and related sectors.”

The three-year pact can be extended by mutual agreement. Bitt officials say their company “utilizes distributed ledger technology to offer efficient, cost-effective digital payment products and services through its Bitt Suite.”

“The Caribbean aims to fully examine the advantages offered by new financial technology,” said Hugh Riley, the CTO’s secretary general. “In particular, blockchain financial services have the potential to advance the objectives of specific programs and activities within the tourism sector. The CTO has a responsibility on behalf of our members to fully explore those possibilities,” he added.

Riley’s affinity for a blockchain-based banking option for Caribbean nations and companies is understandable as cryptocurrencies potentially offer regional governments and businesses several advantages.

That’s because much of the Caribbean is underserved in term of banking services as large U.S. banks have adopted “de-risking” policies aimed at withdrawing capital from Caribbean countries. According to a 2015 World Bank report, referenced in a CaribbeanNewsNow.com report, about half of the Caribbean population is “unbanked,” with 50 percent of citizens lack basic banking services, including bank accounts.

The de-risking strategy is driven in part by advisories from U.S. authorities, who contend Caribbean governments and businesses are heavily involved in money-laundering. American authorities have levied fines on Caribbean banks they say aid the practice.

In turn, Caribbean banks and businesses face shortages in U.S. dollar-based foreign exchange reserves, severely impacting the region’s international trade. Some of the Caribbean’s largest economies, including Barbados and Jamaica, are heavily reliant on import-export business.

Officials at Barbados-based Bitt, along with other Caribbean-based firms, describe digital currencies as a means to support regional trade by reducing foreign exchange costs, thereby improving regional businesses’ profit margins and reducing consumer costs.

“Expanding Bitt’s footprint throughout the region is very important to us because we know how transformational our technology can be,” said Rawdon Adams, Bitt’s chief executive officer.

He added, “That’s particularly the case for the unbanked and by extension for the economy. Tourism is the largest single contributor to the Caribbean economy and is absolutely critical to every single Caribbean nation’s well-being and development. Thus we see this as a very natural and necessary association.”

The region’s affinity for cryptocurrency became evident earlier this year when news emerged that eight Caribbean Island economies, which comprise the Eastern Caribbean Central Bank (ECCB), are considering issuing their own cryptocurrency called the Digital Eastern Caribbean dollar (DXCD).

Ricardo Rosselló, Puerto Rico’s governor, is schedule to be a keynote speaker at Blockchain Unbound, a conference featuring Puerto Rican government and economic development officials with blockchain and cryptocurrency firms including Satoshi Labs.