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  • Puerto Rico has experienced a surge in the use of cryptocurrency.

    Puerto Rico has experienced a surge in the use of cryptocurrency. | Photo: Reuters

Published 30 May 2018
Opinion

Puerto Rico has experienced a surge in cryptocurrency cash.

Caribbean countries hampered by snail-paced economic growth, elevated levels of debt and underserved in the area of banking services, may soon receive a boost from gaining access to world's largest cryptocurrency market.

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The British Virgin Islands-based, Bitfinex, which trades over US$375 billion in assets, is relocating to Puerto Rico. According to Bloomberg, Puerto Rico's Noble Bank will serve as custodian for Bitfinex, not holding its money, but using the Bank of New York Mellon Corp.

Puerto Rico has experienced a surge in the use of cryptocurrency. The funds, which increased from US$191 million in 2016 to US$3.3. Billion at the end of 2017, are kept in the International Financial Entities, or IFE.

Eight Caribbean countries, which comprise the Eastern Caribbean Central Bank, or ECCB, are also assessing opportunities related to the digital currency market. They have contemplated developing their own cryptocurrency called the Digital Eastern Caribbean dollar, or DXCD.

The Barbados-based start-up company Bitt, along with Caribbean central banks, are also studying the possibilities of creating a digital currency to increase trade in a region dominated by the U.S. dollar but plagued by foreign currency shortages.

The General Manager for the Economic Policy at the Central Bank of Aruba, Ryan Peterson, has predicted that the launch of a cryptocurrency would result in a four to five percent GDP growth for just Aruba.

The prospect is considered as the region, according to Cayman Finance, has not surpassed a 0.5 percent growth over the past 20 years.

On February 20, Venezuela launched the pre-sale of the world's first national cryptocurrency based on natural resources. It had generated sales of over five billion dollars during the pre-sale period and recorded over 186,000 certified purchases. The sale of the Petro has also significantly strengthened the country's foreign reserves.

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