Dr. Simon Johnson speaking to students.
‘Digital Barbados’ can be marketed to visitors
Thu, 03/17/2016 - 5:24pm Barbados1
Government can market the idea of a “Digital Barbados” where it can be identified as place of investment, and financing options among many other business-oriented relations. However, Barbados would first have to be users of the digital currency being proposed and in some cases, utilised in other parts of the world.
This was a suggestion put forward by Dr. Simon Johnson as he addressed students at the University of the West Indies on Monday. Dr. Johnson outlined that switching to digital currency, which is largely inevitable, will be particularly fantastic in Barbados, since this country is very connected with the world. In addition, Barbados has modern payment systems, is extremely sophisticated and lining up to pay taxes to the Government is like rubbing salt in a wound.
With a system guided by digital currency, Dr. Johnson argues that transactional and compliance costs often paid to banks will be reduced. Also, he mentioned that transactions will be more instantaneous and finally the unacceptable process of banks holding cheques for three days before the money is made available will be eradicated.
As a result, Dr. Johnson stated that commercial banks in his home, the United States of America, are debating this method. However, he stated that generally, banks have shown for years that they are not good at running risk management systems. Therefore, the Central Bank is yet to decide what innovations they want to employ and the impacts that these innovations will have on the economy.
Speaking of the Central Bank, a rising concern for the bank seems to be where will credit come from if commercial banks are eroded. Johnson explained that there will be the system of having payments made through direct accounts, allowing individuals to borrow and re-pay. In addition, they can decide what degree of data about themselves they want to share. Unlike Bitcoin that is public, other versions of digital currency will be utilised to ensure the privacy of the individual to combat the unknowing sharing of personal information between companies that is practiced to date.