By Robert A. Emmanuel
Amid the Eastern Caribbean Central Bank’s (ECCB’s) continued development of the Eastern Caribbean digital currency (DXCD), the bank’s Governor, Timothy N.J. Antoine, has called on regional governments to adopt a singular data protection regulatory standard.
Speaking at a regional media session on Friday, Governor Antoine spoke about the need for such a standard, stating that “some countries have data protection laws, others don’t, but one of the things we have said, we are going to have to adopt a data protection standard for the Caribbean”.
Referring to the European data protection standard, the General Data Protection Regulation (GDPR), which passed the European Parliament in April 2016 and was enforced on May 2018, Governor Antoine said: “We are going to have to decide what is our standard in the Caribbean—whether we modify or adopt it—there has to be data protection across the Currency Union.
“So, we are collaborating as regulators… about how we can come up with a joint framework for regulation and supervision and that is one of the issues in that discussion,” he added.
Governor Antoine’s comments arose amid questions about how the impact of de-risking and correspondent banking will affect the success of the digital currency.
However, the financial technology team working on the pilot project stated that volunteer banks in the programme will not be spared from fulfilling their anti-money laundering and counter financial terrorism (AML/CFT) obligations under their respective states’ laws.
According to one of the team’s representative, “The operational arrangements will be held on a dedicated network and we will have various applications and solutions, key to that would be KYC solutions and we are looking at various enhancements and feature that will build cyber-resilience and data protection in terms of users on the platform.
“We must highlight that there will be no waivers for stakeholders who are participating in the pilot in terms of regulatory and legislative requirements.”
Governor Antoine added that the programme could potentially help with the know-your-customer (KYC) protocols which, according to Opus President Kelvin Dickenson on the company’s website, have been “a critical cornerstone of the world’s financial system, protecting it from being abused to conceal the proceeds of crime and corruption or the funding of terrorist activity”.
“A non-negotiable for this project is robust know-your-customer protocols to ensure we are able to fight money laundering and terror financing. Our argument, to the IMF for example, is that you need to support digital currency because it has the potential, if there is an international understanding and collaboration, to allow us to have real-time transaction monitoring that will give comfort to correspondent banks and will address the financial integrity risk,” the ECCB Governor stated.