Region can step up regulatory framework for digital currency, says IDB
Published:Tuesday | February 27, 2018 | 12:00 AM
In December 2017, Mexico's Parliament approved a bill to regulate its financial technology sector, including crowdfunding and cryptocurrency firms. The government is the first in the hemisphere to do this, Moreno said, speaking at the post-meeting press conference of
the 7th Annual Caribbean Governors' Meeting of the IDB yesterday.
The governors' meeting was held on February 26 and 27, an event hosted by the Government of Jamaica at The Jamaica Pegasus hotel, New Kingston, under the theme 'JumpCaribbean'.
The meeting, according to organisers, was aimed at helping the Caribbean to embrace, strategically, the reality of the digital revolution. The IDB says it wants to help the region "tap technology and to apply innovative methods as a means to solve problems, improve productivity, generate employment and advance development".
On Monday, at the conference, the Jamaican Government signed a US$68 million investment loan from the IDB to be disbursed over five years for the buildout of the National Identification System (NIDS), and also to help agencies involved in its development to be digitally connected.
The loan is to be repaid over 24 years with interest rate of one per cent above LIBOR.
The Jamaican Government is designing and developing the NIDS with the hope of providing a comprehensive and secure structure to enable the capture and storage of personal identity information for citizens and persons ordinarily resident in Jamaica.
The NIDS is supposed to become the primary source for identity and verification, with the hope of also improving governance and management of social, economic and security programmes.
Moreno, speaking at the press conference, said that, "We are in a moment now in which we want to accelerate the process of change in Jamaica ... in an exponential way."
Praising the process taking place in Mexico, he said the purpose of regulating the digital economy can also deal with "how do we begin the process of conversion [to a digital economy] in terms of regulation".
He added that "this is what's going to allow the kind of scale that we need especially for the development of fintech".
Moreno said he was aware that the field of digital currencies represented "what has been called the regulatory sandbox". However, he noted that, "There are a number of things which can be tested within a framework. Regulators can evolve those regulations over time."
FASTER TURNAROUND
He noted that in Latin America, "There are a number of startups providing microfinance, which, simply by providing your name, birthdate and email address, and combining that with all the interactions we do with our cell phones, provides through big data your consumption patterns, and more important, your capacity to pay.
"That has become the credit score, such that credit can be approved in seven seconds and disbursed within one hour. That's the kind of opportunities we have. It's all about making life for Jamaican citizens so much better. But we have to get ready for that, and certainly there is a learning process," the IDB head said.
At the press conference, Prime Minister Andrew Holness said that Jamaica needed to leverage new efficiencies in government in order to attract the investment which will lead to improved growth. Digital transformation in the public sector, he said, would make Jamaica a better place to do business.
Holness praised the government of Estonia which, close in size of Jamaica, is one of the most advanced globally in fintech, permitting the payment of taxes in five minutes.
He noted as well that the use of digital platforms in Estonia had also led to that country to becoming one of the most transparent internationally. The prime minister said that great levels of unregulated activity in Jamaica fed corruption, and that introducing the national identity system and other digital innovations will reduce the space for growth that corruption finds in unsupervised spaces.