The world is moving further and further into the digital age and of course with that definitive move, there will be a need for financial transactions to be faster, safer as well as easily processed by different countries. That is where Blockchain comes into play.
Blockchain is being touted as the technology to revolutionize how financial transactions are done and is already becoming very significant to how banks will carry out international settlements, transfers and trade finance to name a few.
Blockchain is able to simplify complex processes and acts as a turning point for cross-border transactions with its verification and record keeping.
So it is easy to see why many financial markets will no doubt be looking to embrace blockchain as early as they can, and according to reports coming out of Barbados the island is ready to explore blockchain opportunities, as they push for more fintech companies.
Speaking to the media at the launch of the International Business Week Julia Hope, President of the Barbados International Business Association (BIBA) explained that Barbados was looking to embrace financial technology ‘fintech’ push more fully.
As the association currently works towards meeting the deadlines imposed by the Organization for Economic Co-operation and Development (OECD) through its Base Erosion and Profit Shifting programme (BEPS), Hope assured that the sector officials would continue to examine new markets and opportunities for attracting diversified product offerings as well as the jurisdiction needed for those products and services to be marketed.
“We have some good companies in Barbados already operating – the likes of Polymath and AION, to name a couple,” she said.
“They are here; they are operating and this isn’t just digital currency, this is blockchain. We need to get the regulatory framework in place to enable these companies and others to thrive here, but we could very much become the Silicon Valley of the Caribbean and that is something to aspire to.”
In a joint statement issued by the Central Bank of Barbados with the Financial Services Commission (FSC), both institutions have recognized that fintech innovation could play a critical role in safely lowering the costs of financial transactions, while offering more efficient services to consumers without undermining the financial system.
To that end they have established a framework for a regulatory sandbox, which could last between eight to 12 weeks, to give the regulators an idea of how it will work as well as provide the clarity necessary for businesses offering innovative fintech services, solutions and products.
“One outcome is that having tested it, we don’t like what we see and there are too many risks for consumers, we regulate those activities. We regulate them in such a way that either the likelihood of loss is less or we regulate who can access it,” explained Economist and Chairman of the FSC, Avinash Persaud.
He said it could also attract new investors “that may want to try out a new product in Barbados and if it is successful they might want to try it out elsewhere,” adding that within a year or so, the country would be in a position to go a joint sandbox with a regular in another country for firms who may be doing cross-border transaction.