That the Central Bank of Curaçao and St. Maarten (CBCS) is eyeing the introduction of a new currency (see related story) should be no big surprise. After all, talk of introducing a Caribbean guilder to replace the current Antillean version started long before the dismantling of the Netherlands Antilles per 10-10-10.
But a target date of January 1, 2021, has now been set, indicating at the very least serious intentions. This also seems to mean other alternatives such as dollarization are pretty much off the table.
Former CBCS President Emsley Tromp favoured that option and certainly in St. Maarten the US $ is the most common payment method on the street. However, residents who prefer to use it are charged a one per cent foreign exchange licence fee by government through the commercial banks via CBCS.
Nevertheless, it appears a decision providing clarity has finally been taken, which could be beneficial for long-term stability of the monetary union and its investment climate. The latter is obviously quite important locally as the island continues to rebuild its tourism economy post-Hurricane Irma.
One interesting but also a bit disconcerting plan mentioned was linking the future Caribbean guilder to a regional digital currency. CBCS signed a memorandum of understanding with Bitt Inc for a feasibility study.
Perhaps this is a good idea, but to the common man it may still sound like “abracadabra.” The Central Bank will need to do more to reassure the public in that sense.
The way many people probably feel is that – regardless of its name – the country’s guilder should remain firmly pegged to the American dollar, which reads “In God we trust.”
