BASSETERRE, ST Kitts – Governor of the Eastern Caribbean Central Bank (ECCB), Timothy N. J. Antoine says the soon-to-be-piloted CARICOM Payments and Settlement System (CAPSS) will boost trade and investments within the Caribbean Community (CARICOM) and between CARICOM and Africa.
Speaking at one of the panel discussions during the Caribbean Development Bank’s 55th Annual Meeting of the Board of Governors held 9-12 June in Brazil, Governor Antoine encouraged the audience to think of what CAPSS could do for the region — in terms of moving money faster and cheaper and reducing reliance on correspondent banks. He added that CAPSS would boost Micro, Small and Medium Enterprises (MSMEs), which are key drivers of growth and employment in the Caribbean.
The Governor said most of the trading that goes on within CARICOM is in US dollar denomination, resulting in foreign exchange costs and an overreliance on correspondent banks in order to do business in the region.
The inspiration for the real-time, low-cost CAPSS, which would process transactions in local currencies, is the Pan-African Payments and Settlement System (PAPSS). The African Export-Import Bank (Afreximbank) launched PAPSS in January 2022 to reduce reliance on external currencies for intra-African trade.
The Governor said that, after discussions with Afreximbank about two and a half years ago, the CARICOM Committee of Central Bank Governors agreed to begin “a journey of exploration to see how we could partner.”
The Central Bank of Barbados and the Central Bank of The Bahamas recently successfully completed a proof of concept for CAPSS.
“What we [the CARICOM Committee of Central Bank Governors] want to do next is really pursue a pilot, which is to say — bring additional central banks on board; at least two others for the initial pilot. ECCB will probably be one of those,” the Governor added.