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2019 Winning Essays

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For the ECCU to become economically viable, we must strive towards financial sustainability through technology. Discuss

Towards a Cashless Society: Challenges, Opportunities, and the realities for the ECCU

2019 Eastern Caribbean Central Bank/ Regional Security System – ARU Creative Youth Competition

Age 17-19 Category

First Place Winner: Khadijah Halliday

Sir Arthur Lewis Community College

Saint Lucia

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Towards a Cashless Society: challenges, opportunities and the realities for the Eastern Caribbean Currency Union

On January 16 th , Ignatius JnBaptiste, a St. Lucian bus operator, was shot three

times in the leg by masked gunmen. Merely walking home after parking his

vehicle, he was robbed of his days’ earnings of $900. This unfortunate occurrence

reignited the discussion of the implementation of a cashless system for the Gros

Islet Bus Owners Association. The debate surrounding the viability of a cashless

society is one which has gained increasing traction in recent years — both in the

Eastern Caribbean and the world at large.

Comprehending the concept of a cashless society is integral to understanding the

reason for this debate. A cashless society is one in which the use of physical cash

and cheques is abandoned in exchange for the sole utilization of technological

infrastructures. Many countries have made efforts to replace traditional antiquated

monetary systems with more modern systems complementary to the technological

advances made in recent years. A prime example is Sweden where a myriad of

stores and restaurants no longer accept cash.

This economic concept offers the possibility of creating a myriad of benefits. It

goes without saying, however, that as with any substantial change there are those

who resist this idea, warning of the consequences of undertaking such a major

economic transition. A more in-depth exploration of this concept gives rise to the

realization that it generates both advantages and disadvantages.

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Firstly, with the description of the aforementioned incident—indicative of the high

rates of crime in the Eastern Caribbean— it is clear that one of the prime

advantages of a cashless society would be the reduction of the risk inherent with the

carriage of physical cash. With a cashless system, all money is stored in online

banks which means that a person is no longer susceptible to physical assault at the

hands of robbers and muggers.

Another salient advantage of the transition to a cashless society would be the

reduced occurrence of monetary crimes such as counterfeiting, bribery, money

laundering and tax evasion - for which the Eastern Caribbean is receiving increased

scrutiny. The presence of physical cash helps to facilitate such offences due to its

anonymity and lack of traceability. Conversely, cashless transactions possess digital

footprints that make them more difficult to be concealed.

Thirdly, the reduced need for physical cash management is another benefit of a

cashless society. Production, transport and storage of cash would no longer be

necessary. Money-eating and time-consuming infrastructures and services such as

these would be eradicated with the advent of a cashless society. Resource scarce

Eastern Caribbean governments could then utilize this money for vital economic

and social development programmes.

Additionally, international payments would become less of an inconvenience. When

visiting other nations, travelers often have to buy the local currency. Particularly in

the wider Caribbean, where there are a number of islands with varying currencies,

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if all countries facilitated cashless transactions, travelling could be more hassle free

for Caribbean citizens.

Finally, this economic concept could also prove to be advantageous for the

economy. In periods of slow economic growth, the government could implement

negative interest rates on the deposits kept in the online banks. This means that

citizens would be required to pay to keep their money in the banks instead of the

vice versa. This monetary policy would make saving less attractive and thus prompt

investment, increased lending and spending, thereby stimulating the economy.

Indubitably, all that glitters is not gold. If the transition to a cashless society was

marked solely with advantages, we would not be making weekly visits to the ATM

to withdraw cash. Though there are numerous, one of the most notable

disadvantages of a cashless society is the augmented risk of security and privacy

concerns. Digital systems are highly susceptible to the attack of hackers and

criminals. The digital footprint that cashless transactions leave is also indicative of

exposure and lack of privacy. Hacking can give rise to a myriad of severe problems

such as identity theft, data breaches and fraudulent transactions.

Another unfortunate problem associated with the manifestation of a cashless society

is the lack of dependability and resilience of telecommunications infrastructure,

particularly in the Caribbean. As, many of us experience, there is no guarantee of a

100% uptime of internet or data connections. This irregularity of service could

result in the inability to make purchases when most needed.

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Unfortunately, this system will also illuminate the social and economic inequality

amongst the citizens of the country. Most likely, the most financially vulnerable in

society will be unable to afford the technology—such as smartphones—needed to

facilitate digital transactions. This could thus lead to an increase in crime as they

may resort to committing acts of robbery and theft with the sole purpose of

survival.

Furthermore, apart from those who do not have access to the technology, like with

every major change, there will be people who will be resistant to this novel

system.

Lastly, physical cash also assists in the tracking of spending. Psychologically, there

is a notable imprint when tangible notes leave one’s hand. When using a digital

system, purchases do not register so prominently. With electronic payments, it is

easier to fail to notice how much is being spent and this may lead to

overspending.

To many, the transition to the cashless system may seem fantastical. However, we

are actually a lot closer than it seems. With the increasing utilization of credit

cards, debit cards and systems such as PayPal and mobile phone payments, there

are already a myriad of digital payment options. A cashless society offers many

benefits for the Eastern Caribbean and it is likely that the aforesaid trend will

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continue and that our society will migrate towards the decreased utilization of

physical cash. However, due to the aforementioned realities of small Eastern

Caribbean societies, it is likely that the two systems - the traditional utilization of

physical cash and the ultimate proposed digital cashless system - will continue to

coexist in parallel for the immediate future.

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Bibliography

Hannh, Felicity. “Will a cashless society lead to chaos?”

https://www.independent.co.uk/money/spend-save/cashless-society-tsb-it-failure-

visa-card-payments-tech-digital-problems-a8386901.html Independent, June 8, 2018.

Accessed January 20, 2019.

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Madhu Gaba & Manisha Nagpal, “Cashless Economy: Problems and Prospects,”

International Journal of Engineering & Technology, Special Issue 2017: Volume 5,

Issue 11.

Lepecq, Guillaume. “Cash is Critical” https://www.usnews.com/opinion/economic-

intelligence/articles/2016-04-07/cashless-society-would-be-dangerous-for-financial-

and-national-security US News, April 7, 2016. Accessed January 20, 2019.

Pritchard, Justin. The Pros and Cons of Moving to a Cashless Society

https://www.thebalance.com/pros-and-cons-of-moving-to-a-cashless-society-4160702

The Balance, March 26, 2018. Accessed January 20, 2019.

Sirago Ladan, Muktar Haruna & Lawan Garba, “Prospects and Challenges of

Cashless Policy to the Attainment of Vision 20:2020” Proceedings of the 1st

Management, Technology, and Development Conference, ATB University Bauchi,

Niger. 4-5 November 2015.

Noone, Greg. “Sorry, I have only got my card: can the homeless adopt to a

cashless society” https://www.theguardian.com/cities/2018/feb/27/card-cashless

society-

homeless-contactless-payments-britain The Guardian, February 27, 2018. Accessed

January 20, 2019.

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Shay, Scott. “Cashless society: A huge threat to our freedom”

https://www.cnbc.com/2013/12/12/cashless-society-a-huge-threat-to-our-

freedomcommentary.html CNBC, December 12, 2013. Accessed January 20, 2019.

“Does

a

cashless

society

benefit

everyone?”

http://www.bbc.com/capital/story/20180427-does-a-cashless-society-benefit-

everyone BBC, April 27, 2018. Accessed January 20, 2019.

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2019 Eastern Caribbean Central Bank/ Regional Security System – ARU

Creative Youth Competition

Age 17-19 Category

Second Place Winner: Kheri Hughes

Albena Lake Hodge Comprehensive School

Anguilla

Towards a Cashless Society: Challenges, Opportunities, and the Realities for the

Eastern Caribbean Currency Union

The term “cash” refers to money in the physical form of currency, such as banknotes

and coins. It is a very popular means by which people carry out various transactions on a day to

day basis all around the world, especially in the Caribbean. The race to a completely cashless

society is being led by countries such as Sweden, Canada and the United Kingdom (Nag, 2016);

countries that are usually ahead of the curve for many different forms of advancement. A

cashless society is one in which financial transactions are not conducted with money in the form

of physical banknotes or coins, but rather through the transfer of digital information ( “Cashless

Society”, 2019). While the Caribbean may consist of much smaller territories in comparison, it

may in fact be much more difficult to achieve such a thing as a cashless society. The reality

being, that even with the many opportunities present for achieving a cashless society, an equal

or perhaps larger amount of challenges may arise.

One benefit of pushing towards a cashless society is the major decline if not eradication

of all street robberies. Cash is the fuel upon which many street robberies burn, because cash is

un-traceable making it perfect for most crimes. In most cases burglars, car jackers, drug dealers

and armed robbers all operate and commit their crimes with the end-goal of achieving cash

(Boorstin, 2017). People who are at the point in their life where they are committing crimes,

may very well have no regard for the physical and/or financial pain they are putting others

(locals and tourists) through, which has an adverse effect on the development of the country.

The Caribbean is often described as “the most tourism - dependent region” in the world.

In 2013 alone, 25 million visitors contributed $49 billion towards the area’s gross domestic

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product, which represented 14% of its total GDP ("Tourism in the Caribbean", 2018). The

Caribbean is also known for having some of the highest crime and murder rates in the world,

with Kingston, Jamaica at a homicide rate of 59.71 per 100,000 people being amongst the top

20 highest murder rates in the world ("List of cities by murder rate", 2019). Something must be

done about these crimes, or tourism and related revenue may very well be redirected to countries

deemed safer for tourists to be. Even native residents, fearing for their safety may choose to

migrate out of the Caribbean seeking work in a safer environment, causing massive brain-drain

on the region (Jessop, 2014). The removal of cash may lead to a decrease in blue-collar crimes,

as-well as financial crimes, because it will be harder to hide income and evade taxes when every

transaction is recorded.

Apart from the reduction of crimes, a cashless society can bring improvement in various

parts of society. Consumers are looking for convenience, governments are looking for

efficiency, and businesses are looking for profits (Wright, 2016). Instead of shopping in physical

stores with cash, online shopping can be done from the comfort of your home using digital

means avoiding all lines, potential unpleasant encounters with employees etc. Even if one prefers

to shop at a physical store, the use of self-checkout lanes which accept credit and debit card can

be done to get through quickly and reduce human error. Businesses also usually spend additional

money, hiring security services to protect said cash. Operating costs of a business can be

significantly reduced, by cutting employees such as cashiers or security needed for these tasks.

Many forms of digital trading are available, with cryptocurrencies such as bitcoin being a more

recent form of a completely digital currency that is traded online and can be used to purchase

goods and services in the real world.

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As good as a cashless society may seem, there is a negative side to it for the Caribbean.

On a global scale, getting rid of cash and moving to cyber purchases, has led to an increase in

cybercrime. This suggests that getting rid of cash did not eradicate crime but caused a crime

shift. Demographics of the offenders and victims have changed from people in bad

neighborhoods and living standards to virtually anybody. People who may not have had the

physical ability or be bold enough to commit these crimes in the real word, may be completely

comfortable with committing them over the internet. Financial fraud, cyberterrorism and

cyberextortion are all examples of the type of crimes that arise due to the movement of money

from physical cash to the digital world. Electronic payments would severely challenge the liberty

of people by allowing a person’s income and expenditure to be monitored by the government.

There are some that would not mind this, but on a larger scale people enjoy the sense of privacy

and the stride to a cashless society will strip them of privacy in this sense.

The less-formal business sectors of the economy in the Caribbean would be hurt severely

by the removal of cash from society. These small enterprises and individuals provide all sorts

of goods and services and are responsible for a fair amount of money that informally enters the

economy (Jessop, 2016). The same goods and services tourists take advantage of when they visit

the islands of the Caribbean, and many locals enjoy on a day to day basis such as fast food

places, ice cream shops, souvenir vendors, arts and crafts, etc. Some people who work are paid

only through tips of cash, so their source of income will be directly affected. The very idea of

a cashless society potentially threatens to leave small economies like us behind, where several

citizens are unbanked and operate their life without the use of credit and debit cards. West

Indians are known to be somewhat more resistant to change and very complacent, so with this

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stubbornness and the pace by which Caribbean countries operate the implementation of a cashless

society may take much too long.

The idea of moving towards a Cashless Society in the Caribbean may not be the solution

to all our problems, but if approached carefully with respect to the culture and capabilities that

the Caribbean region has it can be done correctly. There will be groups of people that benefit,

groups that suffer and groups that are affected in both ways so certain measures will have to be

put in place long before the stride to a Cashless Society can be taken. Perhaps if a systematic

approach is taken towards implementing a cashless society, it can be done successfully. One

which is done slowly and carefully over time allowing all members of society to adjust, besides

the criminals of course!

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References

Nag, O. S. (2016, November 30). Countries Leading the World in Cashless Transactions. Retrieved January 11, 2019, from https://www.worldatlas.com/articles/which-are-the-world-s most-cashless-countries.html

Cashless society. (2019, January 18). Retrieved January 29, 2019, from https://en.wikipedia.org/wiki/Cashless_Society

Boorstin, J. (2017, April 20). Going cashless to fight rising financial crime. Retrieved January 29, 2019, from https://www.cnbc.com/2017/04/20/going-cashless-to-battle-financial crimes-.html

Tourism in the Caribbean. (2018, October 29). Retrieved January 11, 2019, from https://en.wikipedia.org/wiki/Tourism_in_the_Caribbean

List of cities by murder rate. (2019, January 10). Retrieved January 11, 2019, from https://en.wikipedia.org/wiki/List_of_cities_by_murder_rate

Wright, R. (Director). (2016, January 5). The Ripple Effects of a Cashless Society [Video file]. Retrieved January 11, 2019, from https://www.youtube.com/watch?v=iSKURdhWCss&t=19s

Jessop, D., Mr. (2016, March 6). The cashless society and the Caribbean. Retrieved January 11, 2019, from https://www.caribbean-council.org/wp-content/uploads/2016/03/The View-from-Europe-Mar6-The-cashless-society-and-the-Caribbean.pdf

Jessop, D., Mr. (2014, September 22). Crime is damaging Caribbean development. Retrieved January 11, 2019, from https://www.caribbean-council.org/crime-damaging-caribbean development/

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2019 Eastern Caribbean Central Bank/ Regional Security System – ARU

Creative Youth Competition

Age 13-16 Category

Second Place Winner: Micah Wishart

St Joseph’s Convent, St George’s

Grenada

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Towards a Cashless Society: Challenges, Opportunities, and the Realities for the

Eastern Caribbean Currency Union

The world revolves around money. Or is it the other way around? Whichever side of the

statement you choose to land on, the fact is that money is the necessary evil by which we all live

and die. I have not met a person so did not appreciated the comfort of having money-barely just

enough, or in abundance.

In recent years, paying digitally, predominantly with debit and credit cards, was in vogue

and there is increased interest in a cashless society. Forbes contributor, Vishal Marria, describes

this cashless state invariably as one where the physical representation of cash, for example coins

and banknotes, are no longer used and only abstract currency is utilized, such as credit cards

and crypto currency. This has already fascinated millennials and techno geeks alike and is not

surprising considering the incessant pace of technological progress. Accordingly, both the seller

and buyer have had to adjust or get left behind. However, before we can totally give up cash, it

is necessary for us to address the attendant difficulties that accompany the realities of that

decision.

Carla is a vendor selling fresh, sought after produce on the weekends in the town square

of St. George’s . She does have difficulties, but is very satisfied with the amount of money she

makes. Carla likes the simplicity of her system, the customer makes a choice and she is paid the

price she decides. It’s easy, comfortable and convenient, confirming the belief of author,

Dominic Frisby, “in the marketplace, convenience usually wins.” Let us imagine for a moment

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that the system went cashless; notwithstanding that its introduction would be a process and not

an event. What prepares Carla for a world without cash?

Sure, you can sell her on its advantages. No cash for thieves to steal and her customers

would be safe, because ‘cashlessness’ can potentially stop crimes like robberies and muggings.

There would also be no need for the storage of her daily earnings, since it would be digital.

However, in Carla’s world, cash is king and she will have to deal with the fact that she can ill afford to buy the machines required for the cashless currency regime and she doesn’t understand

how that even works. At 60 and with limited education, Carla is not willing to learn. She is fine

in that world. She’s comfortable and change, though inevitable, frightens her.

Meet Shaun. He’s an attorney, works in a thriving practice and Shaun loves his digit al

cards. His hauteur towards cash is amusing. He likes the ease of conducting financial

transactions without having to get in line to pay his bills. Shaun puts his mobile wallet to good

use, which Scott A Shay of Signature Bank in New York labels as “Econgularity” . Shaun then

experiences a conspiracy of circumstances that made him question his commitment to being

cashless. His credit was compromised, due to his account being hacked and it took him six

months to fix it. He had realized that his identity had been stolen, when he saw unfamiliar

charges on his account and was receiving calls from collectors about debt that he did not incur.

Just when Shaun was getting back on his feet, nature took its course and a terrible hurricane hit

St. Lucia where he lived. Systems were down, prohibiting access to funds. Like everyone else

on the island, Shaun was fighting to survive.

The preceding scenarios are used as an allegory of the reality that will face the people of

the Eastern Caribbean in the face of the implementation of the cashless system. For context, the

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ending of Carla’s and Shaun’s stories will depend on ECCB’s willingness to acknowledge the

challenges on both sides of the figurative coin of a cashless society.

While it is apposite to note that the Bank’s cognizance of the direction of technological

advancement in relation to the region, I would recommend restraint in the implementation of a

process we barely understand, much less appreciate its impact. As in all things financial, a more

gradual approach is suggested. As the world of digital buying and crypto currency has already

proven that cash isn’t always necessary, protocols should be established that brings businesses

and government entities to offer online services. This should encourage a move toward

cashlessness. Conversely, we must take into consideration people like Carla, existing in the grey

economy, both unable and unwilling to change their way of conducting business.

Therefore, a cashless society would be a less daunting, more sensible prospect, it its

implementation were tempered with a hybrid system of both cash and cards and takes into

consideration people’s propensity to adapt to change. The world revolves around money and

removing it completely may invite unwarranted consequences for which we are not prepared.

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Bibliography/Reference

Puat, Ahmad Najman Muhammad. Universiti Sains Islam Malaysia

New Straits Times

‘Benefits of Going Cashless’

April 3, 2018

Shay, A. Scott

Chairman of Signature Bank

‘Cashless Society: A Huge Threat to Our Freedom’

Cnbc.com

Maria, Vishal

CEO of Quantexa, an enterprise intelligence companrria

‘What A Cashless Society Could Mean for the Future’

December 21, 2018

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2019 Eastern Caribbean Central Bank/ Regional Security System – ARU Creative Youth Competition

Age 13-16 Category

First Place Winner: Nailah Samuel

St Vincent and the Grenadines Girls’ High School

St Vincent and the Grenadines

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Towards a Cashless Society: Challenges, Opportunities and the Realities for the Eastern Caribbean Currency Union.

Imagine a world where all your financial transactions are conducted in cyberspace.

Imagine a world where upon leaving home with only your vehicle proximity key and cell phone

you are fully equipped to transact business. There is no physical cash in circulation but payments

are made through credit and debit cards, electronic fund transfers or virtual wallets. While this

new world offers many opportunities, we will face formidable hurdles. Just about seventy years

after the British Caribbean Currency Board (BCCB) issued the first banknotes in the region, the

feasibility of a cashless society is being explored, the Eastern Caribbean Central Bank (ECCB)

having recently embarked on an initiative to develop a digital payment and settlement platform.

EC notes, which have been issued by the ECCB since 1984 feature wildlife, cultural icons and

national landmarks of our various OECS territories with a portrait of the queen that reminds us

of our colonial past. In the next seventy years, in this imaginable world, this currency may very

well be a scarce remnant of our past.

Our populations are always sceptical about change, especially technological change.

Public acceptance of a digital currency will certainly be a huge challenge. Many credit unions

today still do not have ATM machines and many merchants still do not have credit card machines

allowing for no electronic transactions. Here in St. Vincent, the Searchlight Newspaper is the

only one of three local newspapers to offer an online e-subscription; this makes it clear that as

a people we are not technologically advanced by any stretch of the imagination. While the

penetration of cell phones is high, these devices are not widely used for mobile banking and

other financial and economic activity. The question arises as to how much of our population is

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technologically savvy or even computer literate. There would need to be a huge education drive

to inform the public on the workings of this digital currency.

The confidence that people have in the safety of their money is largely linked to being

able to see it and feel it right in front of them. When money moves to cyberspace, it is no longer

tangible and is now susceptible to hacking, virus codes, phishing and other such digital crimes.

Digital transactions can be easily tracked and recorded raising concerns about surveillance,

privacy and identity theft. To ensure the security of the money, the infrastructure used will have

to be robust and immaculately maintained.

Paper is reliable. No equipment is needed to be able to access it. No computer or phone,

no Internet connection and most importantly, no electricity. Technology is vulnerable to glitches,

outages and mistakes.

There are also legal and regulatory implications of shifting from hard currency to

electronic money and the resultant digitised operational processes. The increased complexity of

financial transactions, sophisticated analytical models and larger volumes of data will demand

that financial regulators have greater capability in order to adequately oversee the finance sector

and accurately assess the soundness of innovative practices.

On the other hand, there are opportunities that will come with such a change. Paper

money is expensive to produce. Having decreased or no production will create less expenditure

leading to more profit. There will be no need for printing, storing and transporting cash, nor for

equipment needed for these activities.

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There are opportunities for the reduction of theft. When a credit card is stolen it can be

easily blocked but when money is stolen nobody has control of what the thief does with it. Other

crimes like tax evasion, money laundering and terrorist financing will also be hindered.

With no cash persons will be unable to withdraw money from the financial system,

meaning that governments and the Central Bank will be able to leverage greater control over the

economy through monetary policy. Instead of hoarding money during economic downturns,

people will have no choice but to invest, lend and spend.

Digital money will bring greater convenience; no need for bank visits and no more long

queues. Transactions can be conducted at any time around the clock and from anywhere. Imagine

not having to wait in line to deposit or withdraw money, saving time and energy.

An attractive feature for parents is that restrictions could be applied to their children’s

digital wallets to control what they buy. This leads to transparency and ease in record keeping.

There are however, factors that must be grappled with. The islands of the ECCU are

labour intensive with a large part of the domestic product being agriculture and many persons

working in the primary sector. This portion of the population relies heavily on cash to conduct

business. Persons such as farmers, fisher folk and street vendors use cash on a daily basis; they

largely make up the “unbanked” sector.

Our technological infrastructure is not yet advanced enough to facilitate this change.

Digital money requires up to date infrastructure which for some institutions would necessitate

significant capital outlay.

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At the end of the month, there are still long lines at various business houses even though

they allow for easier methods of bill payment such as online or via their application. This is

because people have still not adjusted to a lifestyle that includes technology and all of its

advancements. Many persons still have not even migrated to cheques. How would they adjust

to a fully technological currency?

On a global level, the financial sector is undergoing rapid technological innovation. In

the United Kingdom, only 34% of payments are now made in cash. Debit cards overtook cash

as the most popular payment method for the first time in 2017. In Sweden, cash accounts for

2% of the value of all transactions and is predicted to account for half a per cent by 2020. A

cashless society provides the opportunity for more efficient, secure alternatives to traditional

cash transactions, increasing access to financial services. But here in the Caribbean, our

traditional economies, the unbanked sector and many more factors make the transition to a

cashless society an uphill battle.

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Bibliography

ECCB “ECCB to Embark on Blockchain Pilot Initiative with Bitt Inc.” Eastern Caribbean

Central Bank 13 March 2018 Web 28 January 2019

Marria Vishal “What a Cashless Society Could Mean for the Future” Forbes 21 December

2018 Web 28 January 2019

MBA Universe “Cashless Economy: Is Society Ready for Transformation” MBA Universe

Web 28 th January 2019

Sorrel Charlie- “What Happens When We Become a Cashless Society?” Fast Company 15

March 2016 Web 28 January 2019

Sipovsky William “Why All Money Will Soon Be Digital” Due 12 May 2016 Web 28 January

2019

Eastern Caribbean Central Bank “Strategic Plan 2017-2018 Transforming the Eastern

Caribbean Currency Union Together Web 28 January 2019

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2019 Eastern Caribbean Central Bank/ Regional Security System – ARU Creative Youth Competition

Age 17-19 Category

Third Place Winner: Shanique Davis

Antigua State College

Antigua and Barbuda

1

Realities for the Eastern Caribbean Currency Union Moving Towards a Cashless Society and the Opportunities and Challenges that may occur According to Dictionary.com , www.dictionary.com/browse/cashless-society. A cashless society may be defined as a society in which purchases of goods or services are made by credit card or Electronic funds transferrable rather than with cash or checks.’ The matter of a country thinking of moving towards a cashless society warrants discussion and as a result the concept of having a cashless society has been discussed widely, particularly because the world is experiencing an increasing use of electronic methods of recording, managing, and exchanging money in investment and also daily life in many parts of the world. Consequently, before one decides on making a society cashless there should be a discussion of the opportunities but also the challenges in relation to this being implemented. There has been discussion of the eastern Caribbean states and what it would be like if the society was cashless. A cashless society is an idea that has increasing support among senior figures in financial institutions, central banks and many of the governments in wealthy nations. According to Jessop, David “The Cashless Society and the Caribbean.” The Caribbean Council , 8 Mar. 2016, www.caribbean-council.org/cashless-society-caribbean/; the Caribbean or a country could start being a cashless society as they suggest that the process should begin “by first phasing out paper currency, starting with large-denomination bills.” Therefore since, the primary objective of the ECCB is to maintain the stability of the Eastern Caribbean Currency and the integrity of the banking system and there are

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discussions of a cashless society being implemented, there should also be a discussion geared towards if this happens will this make the Eastern Caribbean Currency less stable or more stable and also the opportunities and the challenges that may arise. There are many different opportunities that may arise due to a society being cashless. According to Lin, Melissa. “Is a Cashless Society the New Reality?” Toptal Engineering Blog , www.toptal.com/finance/market-research-analysts/cashless-society-new-reality; “Cashless economy pros includes: reduced tax evasion, less crime and corruption, savings on costs of cash, and accelerated modernization of citizens.” This is because physical cash can be anonymous and untraceable, allowing it to play a large role in crime, including bribery, tax evasion and counterfeiting. However, cashless payments leave behind records that can be traced. Technologies such as voice and face-recognition, can be inbuilt to payment technologies and transactions, therefore having the potential to become more secure than ever because payments can also be protected by end-to-end encryption and fraud-preventing technology. In addition, a related approach recently explored in a speech by the Deputy Governor of the Bank of England, Ben Broadbent, brought about the idea that Central Banks should consider adopting their own digital currencies. This would provide the Eastern Caribbean Central Bank an edge, since the Central Bank issues paper money, there may be a case for it to also issue digital currencies. This would have the effect of enabling Central Banks to provide directly through settlement technology the verification and recording of transfers, therefore making the Eastern Caribbean starting off as being cashless.

But with these opportunities, challenges may arise; therefore, the Eastern Caribbean

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Central Bank cannot go forward adopting digital currencies without considering these challenges. The world has evolved from barter to cash to online banking. Money has been an evolving technology that has been part of human history for years. Therefore, if one decides to change over to a cashless society, problems may arise. As stated by Marria, Vishal. “What A Cashless Society Could Mean For The Future.” Forbes , Forbes Magazine, 21 Dec. 2018, www.forbes.com/sites/vishalmarria/2018/12/21/what-a-cashless-society could-mean-for-the-future/. “A recent report from Access to Cash warns that going cashless too soon could mean millions of people are financially excluded and at risk of exploitation. This emphasizes the need for banks, governments and FinTech companies to work together to ensure that the most vulnerable, the underbanked and the elderly are protected, and that the transition to a cashless society is as smooth as possible.” Also, according to Lin, Melissa. “Is a Cashless Society the New Reality?” Toptal Engineering Blog , www.toptal.com/finance/market-research-analysts/cashless-society-new-reality, Cashless economy cons include “potential violation of privacy, increased risk of large scale personal and national security breaches, and technology-dependent financial inclusion.” Therefore, when digital transactions are easily tracked and recorded this raises the concern about surveillance and who has access to these data trails. This may bring up the worries that the rich may be better equipped to buy themselves privacy, while the average person with a traditional bank account receives no anonymity and so their records may be easily accessed. Additionally, if a cashless less society was supposed to come in play and payments move online, the increased risk of crimes such as identity theft, account takeover, fraudulent transactions and data breaches will be harder to control. Another problem that may occur within the Eastern Caribbean Currency Union with a cashless system, is that relying on modern technology may be a bad idea since

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technology is vulnerable to glitches, outages and mistakes, leaving people without the ability to make transactions at potentially crucial moments. Additionally, the jobs of the people who work at commercial banks may be at risk since so many may not be needed as before. In conclusion, when it comes to a region like the Eastern Caribbean and the realities for the Eastern Caribbean Currency Union, a cashless society could potentially become economically challenging. We can conclude, that we are approaching a less-cash future, but, while progress has been made in this transition, we must consider consequently, the Eastern Caribbean Currency Union and the stability of the countries before making any hasty decisions.

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2019 Eastern Caribbean Central Bank/ Regional Security System – ARU

Creative Youth Competition

Age 13-16 Category

Third Place Winner: Tiffany Weekes

Montserrat Secondary School

Montserrat

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Towards a Cashless Society: Challenges, Opportunities, and the Realities for the

Eastern Caribbean Currency Union

Moving towards a cashless society is a trending topic for most financial institutions,

governments, and everybody in society because of its supposed inevitability. However, how

would it affect the Eastern Caribbean Currency Union? A cashless society can be defined as an

economic state or concept in which transactions are made using electronic money (e-money) via

digital technology rather than the usage of physical forms of cash; banknotes and coins. Once

this movement occurs within the ECCU there will be challenges, opportunities, and realities

which will have to be considered.

The concept of a cashless society is no longer fantasy due to mankind’s ability and the

aid of technology but, it manifests in the challenge of marginalizing some members of society.

Statistics from a 2015 World Bank report show that one in two people in the Caribbean do not

have basic banking services, such as a bank account which emphasizes the difficulty of this

movement. Primarily, the elderly, minors, and some small business owners would be

marginalized due to the level of understanding necessary to perform these transactions amongst

other things. Furthermore, elderly in particular tend to be suspicious of technology and some

even refuse to adapt.

In addition to this, the necessary technology for a viable cashless society may not yet be

exposed to the ECCU member states and even if it was, not everyone would have the ability to

manipulate and easily understand it. How does one introduce a concept like this to fishermen

for example, who may only possess a GPS radio and maybe a flip phone? Before capitalizing

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on establishing digital transactions, systems would have to be set up to provide the technology

for those susceptible to poverty and educate those who are not technologically literate about the

use of digital cash systems. After becoming familiar with this, people would need to understand

crypto-assets and crypto-currencies for example; the popular Bitcoin. It must be understood that

cryptocurrencies are digital currencies with a blockchain which utilize cryptography. (Samuel,

2018) quoted that … before we could get into digital currency, persons must transition through

generally e-money before they could deal with currencies that they are not accustomed to. He

continued that if the region is to seriously consider the transition from cash to electronic money,

‘ solutions must always be inclusive ’ and ‘ if the solutions that are being developed and

implemented are not packaged and put in a way that they can be broadly adopted by everyone,

in terms of access and circulation, then it makes it even more difficult .’ Not only will technology

affect how some conduct transactions, it will also make the process difficult since some will

have no choice but to adhere to the cashless society movement. If this execution is successful,

security concerns may arise.

Unlike cash transactions which are anonymous, digital transactions can easily be tracked

and recorded, and although these transactions are said to be on a peer-to-peer collaborative

network according to article on Steemit (2018), what if criminal organizations come up with

ways to infiltrate these digital systems and access different accounts? Marria (2018) states

concerns of this. “There are also worries that the rich may be better equipped to buy themselves

privacy, while the average person with a traditional bank account receives no anonymity.” This

will also add expenses to businesses since they may spend more to secure/maintain accounts.

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Despite these concerns, there is an opportunity being that since physical cash transactions

can be anonymous, playing a large role in monetary crimes like tax evasion and money

laundering, digitized transactions can help counter that. “ Crypto assets work exclusively on the

internet by using a network of computers that lend their processing power to verify and register

all the transactions made ” (Steemit, 2018). Due to this, these crimes would not have to be

worried about especially since some islands are considered havens for these criminals (The

Economist Group, 2017).

Economic growth is an important opportunity. The region has been stunted with slow

economic growth (ECCB GDP Annual) and in recent years, there have also been high levels of

debt. Utilizing cryptocurrency has been considered to help improve regional trade which has

been affected due to retracting from international banks and foreign reserves. With the issue of

digital currencies for example, the Digital Eastern Caribbean dollar (DXCD) by the ECCU to

boost regional trade, consumers may have a better bargain since exchange costs in relation to

the local currency for USD and vice versa would no longer exist or would be reduced due to the

use of said digital currencies. Improved profits from these nonexistent/reduced foreign exchange

costs could mean that businesses would offer better prices to customers.

With all these challenges and opportunities, we cannot forget the realities, the biggest

being that it is complicated to go completely cashless. What if digital transactions spiral out of

control? As mentioned, many in the region do not have basic banking services. After this is

catered for, the basics of digital transactions would have to be taught. Again, this process will

not be understood by everyone is a short time unless packaged in a way in which it could be

broadly adopted by everyone.

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Another important reality is the vulnerability of technology to failure. Technology tends to be

subject to glitches and outages. Suppose an outage occurs and people are unable to conduct

transactions? This region is already prone to natural disasters which leave islands powerless for

weeks and ‘…our islands are so small, even a little hazard can create a lot of destruct ion ’

(CDEMA, 2010). If all transactions were digital, economies would need to regard this risk.

A cashless society, although supposedly inevitable, has challenges, opportunities and

realities for the ECCU. Challenges involve marginalizing some members of society, the lack of

necessary technology, and even security concerns. The opportunities, in contrast, involve

increased financial security and highly important; economic growth. In reality though, it is

difficult for the ECCU to go completely cashless and technology is not completely reliable due

to our geographical location and sizes.

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Works Cited

Callahan, Mary Ann. “Cryptocurrency to Improve Regional Trade and Consumer Prices?” The

rise of cryptocurrency in the Caribbean. 8 March, 2018. (3 January, 2019.)

https://www.caribbeannewsnow.com/2018/03/08/the-rise-of-cryptocurrency-in-the-caribbean/

ECCB GDP Annual

https://www.eccb-centralbank.org/p/gdp-annual

Marria, Vishal. “What a Cashless Society Could Mean for The Future”. Forbes 21 December,

2018. (22 December, 2018) https://www.forbes.com/sites/vishalmarria/2018/12/21/what-a

cashless-society-could-mean-for-the-future/#d8f84eb32638

Samuel, Lynroy. “ Call for e- money to Be Made Simple”. Antigua Observer. 26 December

2018. https://antiguaobserver.com/call-for-e-money-to-be-made-simple/

The Economist Group.

US Report Names Islands as Money Laundering Centres.

http://country.eiu.com/article.aspx?articleid=1635293747&Country=Curaçao&topic=Politic

s&subtopic=Forecast&subsubtopic=International+relations&u=1&pid=1397445523&oid=1

397445523&uid=1

“What are Crypto Assets and How Do They Work?” 2018.

https://steemit.com/cryptocurrency/@cryptoassets/what-are-crypto-assets-and-how-do-they

work

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