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Montserrat Progresses Towards a Digital Financial Ecosystem

Background

In February 2018, the Government of (GOM) signed a Memorandum of Understanding (MOU) with Bitt to create a digital payments ecosystem in Montserrat. The goal is to achieve universal financial inclusion and to progress towards reducing cash usage and becoming a digital payments society. Both objectives are parts of the overall development strategy of Montserrat and the Eastern Caribbean Central Bank (ECCB).

On February 21st 2019, the ECCB and Bitt signed a contract to conduct a central bank digital ​ ​ (CBDC) pilot within the Eastern Caribbean Currency Union (ECCU). This ECCB CBDC pilot is the first of its kind on the blockchain and will involve a securely minted and issued digital version of the EC dollar (DXCD). The countries included in the pilot are St. Kitts and Nevis, , St. Lucia and . The DXCD will be distributed and used by licensed financial institutions and non-bank financial institutions in the ECCU. The DXCD will be used for financial transactions between consumers and merchants, including peer-to-peer transactions, all using smart devices. For example, an individual in St Kitts and Nevis will be able to send DXCD funds securely from his/her smartphone to a friend or a business in Grenada in seconds - and at no cost to either party.

Governor of the ECCB, Timothy N. J. Antoine, emphasised that, in contrast to previous CBDC ​ research and experiments, the ECCB is going a step further. “This is not an academic exercise. ​ ​ ​ ​ Not only will the digital EC dollar be the world’s first digital currency to be issued by a central bank on blockchain, but this pilot is also a live CBDC deployment with a view to an eventual phased public rollout. The pilot is part of the ECCB’s Strategic Plan 2017-2021 which ​ ​ aims to help reduce cash usage within the ECCU by 50 per cent, promote greater financial sector stability, and expedite the growth and development of our member countries. It would be a game-changer for the way we do business”.

CEO of Bitt Inc. Rawdon Adams said, “I thank the ECCB for choosing Bitt. Our mission is the practical application of cutting edge technology to solve persistent financial problems. It is about enhancing a successful currency union by building on the ECCB’s impressive record of financial stability, development and integration to deliver a quantum improvement to the lives of all the ECCU’s 630,000 citizens. Enhancing economic growth and the quality of life of ordinary people is the aim.”

The ECCB is now poised to embark on the DXCD pilot from March 2019. The pilot will be executed in two phases: development and testing, for about twelve months, followed by rollout and implementation in pilot countries for about six months. As part of pilot implementation, the ECCB will ramp up its sensitisation and education initiatives to facilitate active public engagement throughout all member countries.

Montserrat and Bitt

Further to the MOU signed with Bitt in February 2018, the Government of Montserrat is inviting the public to participate in a progressive initiative aimed at boosting financial inclusion and improving the ease of doing business in Montserrat and across the Eastern Caribbean. This initiative is both historic and essential to the future socio-economic wellbeing of the people of Montserrat.

As Premier Romeo announced, upon signing the MOU, "The people of Montserrat will benefit from increased financial inclusion, and a significant reduction in their need for cash to make payments for goods and services, or as a means of saving. Anyone with a smartphone, tablet or computer, will now be able to conduct these domestic transactions securely, efficiently, and, digitally."

“The decision to move closer to a cashless society is in keeping with Montserrat’s and the ECCB’s overall development strategy to reduce cash usage by 50% in the ECCU,” explained Premier Romeo. “Montserrat, and indeed the wider Caribbean, has a renewed focus on building resilience and securing sustainability. Indeed, creating a modern, digital financial ecosystem, is a key element of this drive to #BuildBackBetter. Though we are small, we are by no means insignificant. The people of Montserrat are proud to be raising the bar, taking the lead, and setting the example, with this groundbreaking initiative,” he added.

While highlighting the importance of creating a digital payments ecosystem in Montserrat, Premier Romeo added that, "The use of cash, as we all know, has risks and costs associated with it. It costs money to print money, and saving cash ‘under the mattress’ and walking around with cash can be risky." He further stated that “...the need for cash for everyday transactions like purchases, or sending money locally to your loved ones, would be eliminated, as you would be able to use Bitt’s mMoney mobile wallet for free peer-to-peer transfers of money using your smartphone, tablet or computer."

The digital payments ecosystem, once implemented, will include a number of free services. Consumers need only to download Bitt’s free mMoney mobile wallet app from Google Playstore and Apple Appstore to access the free services including: sending money to loved ones locally or within the ECCU, paying for goods and services, and adding funds to their wallet, and cashing-out of the wallet at participating merchant/tellers.

Over the past year, Bitt has been working with the Government of Montserrat and other domestic stakeholders, such as the private sector, commercial banks, and the Eastern Caribbean Central Bank (ECCB), to create a digital payments ecosystem in Montserrat.

The Next Steps for Montserrat

The Government of Montserrat is inviting members of the public service to volunteer to participate in this important pilot rollout of Bitt’s mMoney solution in Montserrat. The pilot rollout will be conducted as follows: 1. In this initial phase, eligible Government employees are invited to volunteer to have a portion of their salaries - XCD100 - sent directly to their mMoney mobile wallets on their smartphones, at no cost to them.

2. These volunteers would be asked to indicate their desire to participate in the pilot, to the Treasury Dept.

3. These volunteers would then be contacted by a Bitt representative to facilitate the onboarding process of the mMoney digital wallet on their smartphone.

4. The funds will be sent to their mMoney wallet as agreed, and the volunteers would then be able to use the XCD100 on their mMoney wallet at various Merchants across Montserrat (specific Merchants to be announced).

Bitt and the Government of Montserrat will monitor the progress of the pilot and make a determination in a few months, as to whether to expand the pilot to include more wallet users and merchants.

This is an opportunity to be part of a pilot, which is the first of its kind globally, at no cost and no risk to the users. There is no cost to receive a portion of your salary on your mMoney wallet, no cost to pay a Merchant for goods using mMoney, no cost to send money to another EC dollar mMoney wallet holder, and no cost to cash-out at an mMoney Merchant Teller.

Please reach out to Treasury Department, E. Karney Osborne Building, Little Bay – Tel 491-2663/2454 or Email [email protected] to indicate your desire to participate in the Pilot. ​ ​ ​ ​ ​

Who is Bitt ?

Bitt is a Financial Technology (FinTech) company that specialises in the development, customisation, and integration of secure financial technology solutions, including advanced databases, website, and mobile applications. Its mission is to boost financial inclusion, and improve the security and efficiency of financial transactions by using (central bank) digital currency in its mobile payments solutions. Bitt is headquartered in , where it employs approximately 50 team members, roughly half of whom are software developers. Since 2014, Bitt has been committed to providing financial technology solutions to support financial inclusion, growth, and socio-economic development in the Caribbean.

Bitt uses distributed ledger and blockchain technology to facilitate digital payments on mobile applications, the issuance of digital fiat currency or CBDC, and eventually, the introduction of the Caribbean Settlement Network - a regional CBDC-based cross-border trade and remittance settlement system for the Caribbean, which eliminates the need to use USD and correspondent banks for intra-regional transaction settlement.

The Bitt Solution Software Stack

Bitt’s products provide a full service stack that allows for digital, secure payments to take place throughout the financial system. This means from digital currency issuance, all the way down to consumer and merchant digital transactions. Below is a graphic illustrating the different levels in financial services Bitt serves and the products associated with each. It is important to note, as will be further explained that the ECCB pilot and the Montserrat Project are two separate and distinct initiatives. As noted in the graphic below, the pilot with the ECCB is focused on the first layer of the Bitt stack - namely currency issuance. The Montserrat Project deals with the third layer focusing on the usage by consumers and merchants. More information on both initiatives will be discussed in the subsequent sections.

The ECCB Pilot to Issue a Digital EC Dollar (DXCD)

The ECCB has agreed to conduct a pilot project to digitise the EC dollar through Bitt’s Software Stack. This pilot commenced in March 2019 and is set to last a duration of 18 months. The purpose of the pilot is to demonstrate the capability and benefits of utilising digital payment systems. The ECCB is taking all necessary precautions to maintain the personal data security of the public during this pilot project. It then plans to do a public roll out to the following countries:

The pilot will allow the ECCB to digitise a portion of their currency. Once this has been completed, thoroughly tested and vetted, the ECCB will select three countries, within the ECCU, in which to roll out the digital EC dollars. This means merchants and consumers will be able to sell and purchase goods and services, as normal, with the addition of a new payment option.

The Montserrat Project While the ECCB looks to the technology of the digital dollar issuance, the Government of Montserrat has agreed to test the practical application and use of digital dollars. For this reason, it has partnered with Bitt Inc to launch a pilot that will enable everyday consumers to try using digital dollars to make daily purchases. In order to do this, Bitt will first convert a small percentage of their fiat currency into digital EC dollars. Once this process is complete, it will invite members of the public to participate in using the digital dollars in their daily transactions to test its feasibility, benefits and efficiency.

How it works in Montserrat

Merchants

As the Government of Montserrat embarks on this project, a number of merchants will be coming on board to help test the solution. These include: - Gas stations - Supermarkets

Merchants that decide to come onboard to test the solution will have access to the following features: ● Accept digital payments ● Integrate mMoney into their website ● Create customised reports on transaction data ● Customise permissions and controls employee accounts ● Opt to be a “Merchant-Teller” and act as a cash-in/ cash-out location for mMoney

Fees associated with utilising mMoney to accepting digital payments are as follows:

Item Fee

Accept Payments as a Merchant XCD0.20 per transaction

Accept Payments as a Merchant-Teller XCD0.05 per transaction

Consumers We will be offering public servants, who wish to partake in this pilot project, the option to accept a portion of their salary in digital dollars sent directly to their smartphones. If you would like to learn more about receiving a portion of your salary in digital dollars please reach out to Treasury Department, E. Karney Osborne Building, Little Bay – Tel 491-2663 / 2454 or Email ​ [email protected] to indicate your desire to participate in the Pilot. ​ ​ ​

While utilising the mMoney Wallet app, users with the wallet will be able to take advantage of the following features: ● Digital payment to merchants (directly from your smartphone) ● Peer-to-Peer transactions ● Track Spending ● Phone Credit top up with Flow and Digicel

All of these features, and more will be available to users free of charge. Only merchants pay transaction fees and they are significantly lower than traditional credit or debit card fees.

Rollout Plan

Public Rollout Plan Description Desired Date Parties Responsible

Send out approved communique asking for April 2019 GOM volunteers

Reach out to Merchants May 2019 Bitt & GOM

Ensure full mMoney sign up process is June 2019 Bitt & GOM complete

Initiate mMoney payments and advertise July 2019 Bitt use of mMoney at participating merchants

Internal Rollout Plan Description Desired Date Parties Responsible

Complete and send out Communique April 2019 GOM asking for volunteers

Acquire Merchants (fully signed up) May 2019 Bitt & GOM

Register as external company, Open Bank May/June 2019 Bitt & BoM Account with BoM

Design Digital Dollar Issuance flow May/June 2019 Bitt (Physical cash from treasury→ BOM → Digital Dollars)

Receive information for public servant May 2019 GOM volunteers including: ● Full Name ● Wallet Address ● Amount to Receive

Designate frequency of check-ins to ensure May 2019 Bitt & GOM salaries are received and digital dollar to cash ratio is maintained

Design contingency plan for failed May 2019 Bitt payments and failed salary deposits

Train on Salary disbursements panel June 2019 Bitt & GOM

Is this safe?

Bitt’s mMoney solution has been operating within the regulatory sandbox framework with the Central Bank of Barbados. With continued regulation from Barbados’s Central Bank and its Financial Services Commission (FSC), we are confident in the security and operations of mMoney. The technology mMoney uses is identical to the security protocols used by banks to secure Internet and Mobile banking apps, so mMoney is just as safe as the Banks.

FAQs

Set Up How do I sign up? ● Bitt will reach out to the volunteers for the Pilot with instructions and assistance with downloading the mMoney app signing up, and creating an account.

Do I need any documents to sign up? ● Once you create an account you will be at Level One verification with a limited transaction amount. To increase this amount, submit one (1) photo ID and Proof of address (no older than 90 days) via our app or on our website through the verification option on your dashboard.

Do I need a minimum balance? ● No! You choose how much money you want to keep in your mMoney Wallet at all times.

What do I need to sign up? ● A valid email address and a strong password.

How much does it cost to sign up? ● Nothing. It’s free!

Can I sign up here in Montserrat? ● You can sign up anywhere, as long as you have Internet access and a browser.

Fees Is there a monthly fee? ● There is no monthly fee for having or using the mMoney Wallet.

Is there a fee for me to cash out? ● No, using mMoney is completely free!

Is there a fee to purchase goods? ● No, there is no fee to purchase goods using mMoney.

Is there a fee to send money to my friend? ● No, peer to peer transactions are free!

What is the fee for merchants to accept mMoney payments? ● Merchants will be charged XCD0.20 per transaction. ● Merchants have the option to be a Teller in addition to being an mMoney Merchant. Transaction fees in this case will be XCD0.05

Function Can I send money to anyone? ● You can send money to anyone that has an mMoney wallet.

Where can I use it? ● You can use your mMoney wallet to purchase goods and services at any mMoney Merchant. A map of the locations where you can use mMoney can be found by clicking “map” in the mMoney app.

Where can I cash out? ● You are free to cash out at any mMoney Merchant Teller or at the Bank of Montserrat.

Can I send money abroad? ● At this time we only offer a domestic service in Montserrat and Barbados, so only transactions completed in Barbados dollars and EC Dollars are available.

What if I no longer wish to have an mMoney account? ● In the unlikely event that you wish to stop using mMoney, you are free to do so! Contact our support team via [email protected] to deactivate. Be sure to leave us feedback so that we can ​ ​ improve.

How can I send money to someone? ● Money can be sent to a QR code generated by another mMoney wallet nearby, or sent to an address (think: bank account number). After sending or receiving money, that person can be added to your contact list in the app for easy future use!

How can I send money to someone without having to scan their phone? ● You can send money to someone not nearby by using the contacts feature, or their wallet name. The wallet name can be found by clicking “Receive Money” on the individual’s mobile wallet app.

What happens if I lose internet connectivity in the middle of a transaction? ● In the event that you lose internet connectivity, your transaction will not be processed.

How can I request a merchant to accept mMoney? ● If your favorite merchant is not currently accepting mMoney you can refer them by submitting a request at: [email protected]

Are all merchants able to conduct the Teller function? ● No, merchants may choose not to offer the Teller function. So the availability of this service varies from merchant to merchant.

How can I get my friends on mMoney? ● The easiest way for you to invite new mMoney users is by sending them a referral. You can do this easily within the app.

How do I learn about new features and promotions? ● Follow us on our social media @mmoneybb to stay up to date with our latest features and promotions!

Security What if I lose my phone? ● Not to worry! If you lose your phone you will not lose your money because every account is protected by a username and password and an automatic time out feature. For ease of mind, simply log into mmoneybb.com to check your balance. Once you get your new phone, log in with your credentials as normal and you're all set!

How safe is this? ● The technology mMoney is identical to the security protocols used by banks to secure Internet and Mobile banking apps.