The Governor of the Eastern Caribbean Central Bank Timothy Antoine said that the proof-of-concept for the CARICOM Payment and Settlement System (CAPSS) by Barbados and the Bahamas could be a potential game-changer for regional trade and financial inclusion.
Speaking at the CDB’s fintech seminar, Governor Antoine noted that “at least 90 percent of all payments in the Caribbean right now are denominated in US dollars.”
“What that means is foreign exchange costs, but perhaps equally challenging is the over-reliance on correspondent banks to be able to do business in the region,” he remarked.
The CAPSS system will enable real-time, low-cost cross-border payments in local currencies, with settlement completed within seconds.
Antoine said the system would allow someone in St Kitts to send Eastern Caribbean dollars directly to a recipient in Barbados who would receive Barbados dollars, completely bypassing US dollar intermediation.
Following the successful proof-of-concept from Barbados and the Bahamas, central bank governors from across the region met in St Maarten in May 2025 where the governors agreed to introduce a more robust validation phase involving at least two additional central banks.
At the seminar last week, Governor Antoine said the Eastern Caribbean Central Bank would likely be among the next participants.
“Behind the scenes, there will be a net settlement in US dollars between the two central banks with PAPSS acting as the settlement agent,” Governor Antoine explained. “But you are not dealing with any foreign exchange issues. You don’t have to pay wire transfer fees and all of these costly arrangements that we have now.”
“Think of what that could do for our region in terms of trade, small business,” he said during the Fintech panel discussion.
Antoine highlighted the broader vision for CAPSS, which extends beyond CARICOM to include connections with Africa. “If my child is at university, I could send her money directly in EC dollars, which she can get in Barbados dollars. And if she happens to want to go and do a semester in Ghana, for example, I can do the very same thing eventually,” he illustrated.
PAPSS, which serves as the model for CAPSS, processes instant payments without requiring currency conversion to hard currencies, eliminating the need for funds to leave the region for conversion before being sent back to beneficiary banks.
Dr Angelo Duarte, Deputy Governor for Licensing and Resolutions Office of the Central Bank of Brazil, shared lessons from Brazil’s PIX instant payment system, which processed 63.4 billion transactions worth $4.6 trillion in 2024.
Dr Duarte noted how person-to-business transactions grew from 10 to 41 percent of all PIX transactions between 2021 and 2024, demonstrating the commercial potential of modern payment systems.
“Technology can be transplanted from one country to the other,” Duarte observed. “It’s much cheaper sometimes to adapt the technology to the regulatory framework of each country than create new things.”
The Payment Systems and Services Bill, 2025 would repeal the existing Payment System Act 2007 and establish the Eastern Caribbean Central Bank as the primary regulator for all payment service providers across the eight-territory Currency Union.
The proposed legislation includes provisions for a mandatory licensing regime for all payment service providers and operators, establishing a regulatory sandbox for fintech innovation, and implementing enhanced consumer protection measures.
