Eastern Caribbean Central Bank prepares for commercial deployment of CBDC

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The Eastern Caribbean Central Bank (ECCB) has announced its search for retail vendors in preparation for the planned commercial deployment of its central bank digital currency
(CBDC) project dubbed DCash 2.0.

In a Request for Vendor Information (RFVI) document, the ECCB says the search will lay the foundation for starting a discovery process for the mainstream rollout of DCash 2.0. In particular, the ECCB’s RFVI targets vendors that have developed CBDC offerings that can support retail functionality.

The monetary authority for eight Caribbean nations has been experimenting with retail CBDC DCash since 2021, with the central bank keen to increase the range of functionality
for the current DCash CBDC system.

“The ECCB is interested in a retail payment solution which performs core CBDC ledger functions and supports integration via secure API layer, allowing for third-party systems to integrate within the solution,” read the announcement.

Vendors with solutions in offline payments, core banking systems, and identity management are encouraged to submit their applications to the ECCB via email. Other areas of interest to the ECCB include advanced business intelligence, wallet services providers, payments services, and reporting providers.

Firms with more than one retail CBDC solution can address multiple topics in their applications, with the ECCB prohibiting the submission of any copyrighted information. Solutions that meet the ECCB’s requirements may be integrated into the DCash CBDC system as the regional banking regulator prepares itself for another round of studies.

“No business proprietary information, copyrighted information, or personally identifiable information should be submitted in response to this RFVI,” said the ECCB. “Information gathered in the course of the RFVI may form part of public discussion.”

The ECCB says it is open to solutions catering to person-to-person, consumer-to-business, and individual or corporate payments to governments in the form of taxes or state grants. Solutions are expected to align with existing anti-money laundering processes and should contain protections against counterfeiting and double spending while guaranteeing consumer privacy.

CBDCs are not all smooth sailing

Despite the benefits associated with CBDCs, central banks have found the concept of a mainstream launch to be a hard nut to crack. Fears of disrupting the delicate balance of their local financial ecosystem have stifled progress, with hardliners labeling CBDCs as a government surveillance tool.

Apart from upsetting the balance, central banks have to grapple with technical challenges associated with a CBDC launch, with Nigeria’s eNaira and the ECCB’s DCash running into technical problems in the past.

Fellow Caribbean nation Jamaica is facing the challenge of boosting adoption levels for its CBDC offering among merchants with various government-backed initiatives.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: Deploying CBDCs on the original Bitcoin