Suzanne Shep­pard

?Af­ter two years of plan­ning and de­vel­op­ment, Bitt–the Caribbean's first bit­coin and dig­i­tal ex­change com­pa­ny– will be launched on March 30. This means that peo­ple across the re­gion will soon have ac­cess to a soft­ware plat­form for buy­ing and sell­ing cryp­tocur­ren­cies and dig­i­tal com­modi­ties with tra­di­tion­al bank­ing in­te­gra­tion.

Bitt co-founders Gabriel Abed and Oliv­er Gale say their plan is to have dig­i­tal cur­ren­cies stand side by side with tra­di­tion­al cur­ren­cies through­out the Caribbean in the not too dis­tant fu­ture. Fol­low­ing the com­pa­ny's of­fi­cial launch, bit­coin, the world's first de­cen­tralised dig­i­tal cur­ren­cy, will be­come ac­ces­si­ble to cit­i­zens across the re­gion, in­clud­ing the es­ti­mat­ed 60 per cent who are cur­rent­ly un­banked, or un­der banked.

"We serve the in­ter­na­tion­al mar­ket but are fo­cused and cen­tred on the Caribbean of­fer­ing the core ser­vices of mo­bile dig­i­tal wal­lets, in­ter­na­tion­al re­mit­tances and e-com­merce mer­chant so­lu­tions util­is­ing new soft­ware called bit­coin and blockchain," Gale, the com­pa­ny's CFO said.

Bitt, which is based in Hast­ings, Bar­ba­dos, is of­fer­ing a sys­tem that is com­plete­ly brand­ed, built, de­signed and man­aged in the Caribbean. The com­pa­ny pro­vides high tech sys­tems at a frac­tion of the cost of the mon­ey trans­fer sys­tems cur­rent­ly used in the re­gion.

Gale and Abed, the com­pa­ny's CEO, are of the view that tra­di­tion­al lega­cy fi­nan­cial sys­tems are out­dat­ed.

"They have huge build­ings and many em­ploy­ees. They have pa­per sys­tems, cen­tralised man­age­ment ledgers," Gale said.

Abed ex­plained: "Every­thing you can pay for in cash, I can pay for in bit­coin."

Abed's in­volve­ment in the world of dig­i­tal cur­ren­cy was a nat­ur­al pro­gres­sion from his ed­u­ca­tion­al pur­suits. A grad­u­ate of the Uni­ver­si­ty of On­tario, In­sti­tute of Tech­nol­o­gy with a Bach­e­lors de­gree in In­for­ma­tion Tech­nol­o­gy ma­jor­ing in Net­work Se­cu­ri­ty, his pro­fes­sion­al qual­i­fi­ca­tions cov­er cryp­tog­ra­phy, soft­ware de­vel­op­ment and in­tru­sion de­tec­tion sys­tems.

Abed was in­tro­duced to cryp­tocur­ren­cies in ear­ly 2010 dur­ing his un­der­grad stud­ies but over the past 12 years, he has been lead­ing soft­ware de­vel­op­ment in­no­va­tions in the re­gion as part of a team of ded­i­cat­ed de­vel­op­ers.

His busi­ness part­ner, Gale, fol­lowed a dif­fer­ent aca­d­e­m­ic route, earn­ing an ho­n­ours de­gree in ac­count­ing and man­age­ment from the Uni­ver­si­ty of Bris­tol. He was in­tro­duced to Bit­coin in 2012 and im­me­di­ate­ly im­mersed him­self in the field,com­bin­ing his knowl­edge of tra­di­tion­al fi­nance with a grow­ing knowl­edge of dig­i­tal fi­nance.

At present, Bitt is run by an eight-mem­ber team, head­ed by Abed and Gale, as well as three ad­vis­ers: Pe­ter Tod, Bar­ry Gale QC and Je­re­my Stephen. Once the com­pa­ny is ful­ly im­ple­ment­ed, users will be able to sign up to log on to bitt.com, fol­low the in­struc­tions and im­me­di­ate­ly start ac­cept­ing bit­coin from any­one around the world.

The sys­tem is be­ing in­tro­duced in re­sponse to the need for a bet­ter pay­ment sys­tems in the re­gion to re­duce the high costs and red-tape as­so­ci­at­ed with tra­di­tion­al elec­tron­ic pay­ment sys­tems.

Ac­cord­ing to a re­cent ECLAC (Eco­nom­ic Com­mis­sion of Latin Amer­i­ca and the Caribbean) re­port, the Caribbean needs to low­er the cost of re­mit­tance ser­vices. Dig­i­tal cur­ren­cies rep­re­sent a po­ten­tial op­tion for do­ing just that.

Abed and Gale were in Port-of-Spain last week for a meet­ing or­gan­ised by ECLAC in­volv­ing reg­u­la­tors and rep­re­sen­ta­tives of dig­i­tal cur­ren­cy com­pa­nies. The talks were aimed at de­vel­op­ing a frame­work for reg­u­la­tion of the sys­tem.

At the meet­ing, held at ECLAC's sub-re­gion­al head­quar­ters for the Caribbean on March 12, Caribbean ex­perts in the field of dig­i­tal cur­ren­cy re­viewed the op­por­tu­ni­ties and risks as­so­ci­at­ed with that type of cur­ren­cy.

They al­so ad­dressed the po­ten­tial im­pact dig­i­tal cur­ren­cies may have on sec­tors such as bank­ing, e-com­merce and re­mit­tance and whether its use can en­able im­prove­ments to elec­tron­ic and mo­bile-based pay­ment sys­tems and low-cost re­mit­tance ser­vices.

ECLAC plans to re­view na­tion­al poli­cies in an­tic­i­pa­tion of the use of cryp­tocur­ren­cies like bit­coin, as well as tech­nolo­gies in the field of dig­i­tal pay­ments, to de­ter­mine how they will im­pact the re­gion.

Gale and Abed said there are some chal­lenges in the im­ple­men­ta­tion of the sys­tem, in­clud­ing lack of e-com­merce-sup­port­ing leg­is­la­tion, in­ad­e­quate tech­ni­cal ca­pa­bil­i­ty and dif­fi­cul­ties work­ing with some lo­cal banks, but they are de­ter­mined to get over those hur­dles. In T&T, the en­abling leg­is­la­tion is rel­a­tive­ly new, and is pri­mar­i­ly fo­cused on elec­tron­ic pay­ments for gov­ern­ment sys­tems.

How­ev­er, wide­spread use of mo­bile-phones in the re­gion and easy avail­abil­i­ty to fa­cil­i­tate fi­nan­cial pay­ments or trans­ac­tions through short mes­sage ser­vice (SMS) mes­sages and oth­er wide­ly avail­able sys­tems, means there is scope for ac­cep­tance and use of dig­i­tal cur­ren­cies with­in a rel­a­tive­ly short space of time.

Bit­coin us­es cryp­tog­ra­phy-based block-chain tech­nol­o­gy. At the core of the sys­tem is a ledger that can be used to trans­fer ti­tle of own­er­ship to units of dig­i­tal cur­ren­cy. It is large­ly self reg­u­lat­ing, with fea­tures built in­to the pro­to­col that pro­vide con­sumer pro­tec­tion and trace­abil­i­ty.

The Bitt co-founders are op­ti­mistic that with­in a mat­ter of months con­sumers in sev­er­al parts of the re­gion will be ac­cess­ing bit­coin's ful­ly au­to­mat­ed, trans­fer­able man­age­ment ledger.

"We are rid­ing a tech­nol­o­gy wave with fi­nance that is cut­ting costs, mak­ing it faster, mak­ing it cheap­er, mak­ing it pos­si­ble for peo­ple out­side of the bank­ing sys­tems to con­trol their mon­ey us­ing their mo­bile phones," said Abed.

"Our com­pa­ny will pro­vide a reg­u­lat­ed en­vi­ron­ment for these glob­al ser­vices in a com­pli­ant way."

?What is bit­coin?

Bit­coin is an on­line pay­ment sys­tem in­vent­ed by Satoshi Nakamo­to, who pub­lished his in­ven­tion in 2008, and re­leased it as open-source soft­ware in 2009.

The sys­tem is peer-to-peer; users can trans­act di­rect­ly with­out need­ing an in­ter­me­di­ary. Trans­ac­tions are ver­i­fied by net­work nodes and record­ed in a pub­lic dis­trib­uted ledger called the block chain. The ledger us­es its own unit of ac­count, al­so called bit­coin.

The sys­tem works with­out a cen­tral repos­i­to­ry or sin­gle ad­min­is­tra­tor, which has led the US Trea­sury to cat­e­gorise it as a de­cen­tralised vir­tu­al cur­ren­cy. Bit­coin is of­ten called the first cryp­tocur­ren­cy, al­though pri­or pro­pos­als ex­ist­ed. Bit­coin is more cor­rect­ly de­scribed as the first de­cen­tralised dig­i­tal cur­ren­cy. It is the largest of its kind in terms of to­tal mar­ket val­ue.

Bit­coins are cre­at­ed as a re­ward for pay­ment pro­cess­ing work in which users of­fer their com­put­ing pow­er to ver­i­fy and record pay­ments in­to the pub­lic ledger.

This ac­tiv­i­ty is called min­ing and is re­ward­ed by trans­ac­tion fees and new­ly cre­at­ed bit­coins. Be­sides min­ing, bit­coins can be ob­tained in ex­change for fi­at mon­ey, prod­ucts, and ser­vices.

Users can send and re­ceive bit­coins for an op­tion­al trans­ac­tion fee.

Bit­coin as a form of pay­ment for prod­ucts and ser­vices has grown, and mer­chants have an in­cen­tive to ac­cept it be­cause fees are low­er than the two to three per cent typ­i­cal­ly im­posed by cred­it card proces­sors.

De­spite a big in­crease in the num­ber of mer­chants ac­cept­ing bit­coin, the cryp­tocur­ren­cy doesn't have much mo­men­tum in re­tail trans­ac­tions. Un­like cred­it cards, any fees are paid by the pur­chas­er, not the ven­dor.

The Eu­ro­pean Bank­ing Au­thor­i­ty and oth­er sources have warned that bit­coin users are not pro­tect­ed by re­fund rights or charge­backs.

The use of bit­coin by crim­i­nals has at­tract­ed the at­ten­tion of fi­nan­cial reg­u­la­tors,leg­isla­tive bod­ies, law en­force­ment, and me­dia.

They list­ed mon­ey laun­der­ing, fi­nanc­ing of il­lic­it ac­tiv­i­ties, theft, fraud, tax eva­sion, and use in black mar­kets as pos­si­ble.

As of 2013, the crim­i­nal ac­tiv­i­ties cen­tered around theft and black mar­kets. Of­fi­cials in coun­tries such as the Unit­ed States al­so recog­nised that bit­coin can pro­vide le­git­i­mate fi­nan­cial ser­vices to cus­tomers.

Source: Wikipedia