Barbados-based blockchain startup Bitt has signed a Memorandum of Understanding (MOU) with the Centrale Bank van Curaçao en Sint Maarten (CBCS) to explore the possibility of issuing central bank-issued digital currency.

Bitt, a Medici Ventures portfolio company, aims to leverage distributed ledger technology for efficiently and securely issuing “digital dollars” that equate with existing fiat currency, under regulatory oversight. Having signed an MOU with the Eastern Caribbean Currency Union (ECCU) earlier this year, the MOU with the CBCS marks Bitt's second MOU with a formal monetary union.

The CBCS aims to explore the feasibility of issuing a digital currency that will facilitate digital financial payments in the two countries as well as to maintain the external stability of the guilder.

"The central bank is determined to address its challenges proactively by exploring the latest technology available, for example, to reduce the level of cash usage within the monetary union, and to facilitate more secure, more AML and KYC compliant, and more efficient financial transactions within and between Curaçao and Sint Maarten," Leila Matroos-Lasten, acting President of the CBCS, said.

Bitt CEO Rawndon Adams explained that central bank digital currencies are particularly relevant in monetary unions where member states are separated by long distances.

“This makes the Central Bank's task of printing and distributing physical cash securely across member states that much more challenging and costly. A central bank issued digital currency, which can be used on mobile wallets, facilitates secure and frictionless financial transactions and payments, using a mobile phone / tablet, within each jurisdiction and across jurisdictions in the monetary union," Adams added.

Earlier this year, the CBCS met with the Curaçao Blockchain and Crypto Taskforce (CBCT), which was set up to investigate possibilities for Curaçao to position itself as a facilitating jurisdiction to attract investments in digital assets, as well as blockchain technology, tokens and smart contracts for enhanced business conducts. It expressed its “willingness and ability to be a valuable stakeholder in the process of ushering [its] jurisdiction into an era of enhanced compliance and innovation.”