ECCB Urges Caution Against Non-Traditional Financial Services

The Eastern Caribbean Central Bank (ECCB) is warning customers in Montserrat and the rest of the sub-regional Organisation of Eastern Caribbean States (OECS) to be cautious against using non-traditional financial services.

The ECCB says that they could suffer “financial losses by getting involved in initiatives which they do not yet understand fully”.

In a statement, the ECCB said that “these include but are not limited to peer to peer lending, digital wallets, crowd funding ventures, crypto-assets and initial coin offerings (ICOs) in the Eastern Caribbean Currency Union (ECCU)”.

The ECCB, which serves as a central bank for Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines, St Kitts-Nevis, Montserrat and Anguilla, said consistent with its growth and development mandate, it supports and encourages innovation and believes that financial innovation is essential as the Eastern Caribbean region forges a path to socio-economic transformation.

The bank says before involvement with these initiatives, citizens are advised to consider the following questions, what do they know about this service provider and the services being offered, whether they understand both the opportunities and the risks and whether the service provider is regulated and by whom.

Other questions include whether the service provider has appropriate anti-money laundering (AML) controls and what dispute resolution mechanisms exist if there is a dispute with this service provider.

The ECCB added that in collaboration with domestic and other regional regulators, it is reviewing existing laws to identify changes which may be required to ensure adequate regulatory cover for these initiatives.

In this process of review, the ECCB is also engaging service providers in the FinTech industry on how best to support financial innovation.