Poverty will be reduced if the region shifts from using hard currency to a digital payment ecosystem because banking and financial services will become available at lower costs.
That is according to Marla Dukharan, a regional economist who spoke at the recent Sir Arthur Lewis Memorial Lecture.
She said, “The second disruptive reform I believe we need in this region, in order to build resilience, reduce poverty, and attain sustainable socio-economic development is, the creation of a Regional Digital Payments Ecosystem, which has the power to achieve Universal Financial Inclus-ion, and eliminate the need to use hard currency for intraregional financial transactions.”
She explained that the concept of this system, involves the digitalisation of “our fiat currency, meaning, for example, the EC Dollar” followed by the creation of a regional digital currency and a multilateral clearing system all built on using distributed ledger or block chain technology.
“Already the Fins, Swedes, Norwegians, Estonians, and other countries around the world are building increasingly digital payments ecosystems and cashless societies,” the economist said.
Dukharan also said that this is something the Caribbean must seriously consider as countries in that region are increasingly being “financially excluded from a national and regional level and on an individual level … because of what foreign banks call de-risking.”
(More in today’s Daily Observer)