The End of Banks in the Caribbean – Or the Beginning of Something Else?

Imagine sending money to family on another island instantly, with almost no fees. Imagine a future where you don’t need a bank to save, get paid, or run your business, just your phone. This isn’t science fiction. That future is breathing down our necks. But in the Caribbean, the dream collides with the hard wall of global finance, where laws, compliance, and foreign gatekeepers decide who gets to play.

The Caribbean stands at a financial crossroads — caught between outdated banking systems and the promise of a digital, borderless future.

For generations, the banks told us there was only one way to handle money: their way. Yet the old system is broken. Transfers across islands are slow, suffocated by bureaucracy, and the fees, always the fees, feel like daylight robbery. Families are punished for helping each other; businesses are strangled by delays. The region’s economic plumbing is clogged.

But here’s the real kicker: it isn’t just greed keeping us chained to this system. It’s fear. Fear of the regulators. Fear of the foreign correspondent banks who hold the keys to the global dollar system. And that fear shapes everything about why crypto, especially Bitcoin has been shoved to the margins in the Caribbean.

The Correspondent Banking Straitjacket

To live in the Caribbean is to live under the shadow of de-risking. According to the Economist Intelligence Unit, “About 40 % of correspondent banks have withdrawn from the Caribbean over the past 15 years, which has reduced the region’s access to international finance and credit…” The Caribbean remains one of the worst-hit regions, with countries such as Belize, St. Vincent and the Grenadines, the Bahamas, and Jamaica each losing more than 40 % of their correspondent banking relationships, based on SWIFT data.

Banks in New York, London, and elsewhere label Caribbean institutions “high-risk jurisdictions operating in a high-risk region,” as noted by Calvin Wilson, Executive Director of CFATF. The consequence: Caribbean banks risk being cut off entirely if they even whisper about engaging with crypto, especially volatile, unregulated tokens. Once those lines are severed, countries face financial isolation.

So no, it’s not simply that banks don’t want to innovate it’s that they can’t afford to, unless they’re willing to gamble the entire financial lifeline of their nation.

The Fee-Takers at the Helm

Across CARICOM, a handful of commercial giants hold sway. Republic Bank (Trinidad & Tobago), FirstCaribbean International Bank (CIBC), RBC Royal Bank, Scotiabank, and First Citizens, among others. These institutions profit heavily from a fee-based model: charges on wire transfers, foreign exchange spreads, remittances, ATM usage, account maintenance, you name it. Non-interest income, which includes fee and commission income, constitutes a substantial revenue stream. For instance, Republic Bank Group reported an “other income” of TT$949.6 million in 2024 representing about 28% of its total profit contributors, reflecting the heavy reliance on fee-based earnings.

Why would these banks advocate for reform that could decimate their golden goose? They’re disincentivised from promoting stablecoin or digital payment frameworks that could drive transaction costs to near zero. Yet, ironically, their current model may be their undoing. As Caribbean consumers increasingly embrace mobile wallets, fintech alternatives, or stablecoin platforms that circumvent traditional banks, these incumbents risk becoming obsolete. And as CBDCs or well-regulated stablecoins gain traction, the fee-skimming revenue model could collapse ultimately leaving these institutions without a cushion if payment monopolies break. In chasing short-term windfalls, they may be scripting their own extinction.

Crypto vs. Stablecoins – A Crucial Distinction

Here’s where the debate gets messy. Politicians, central bankers, and commercial banks often lump everything together: Bitcoin, Ethereum, Dogecoin after all it’s all “crypto.” But that’s like comparing a lottery ticket to a government bond.

Stablecoins are different. Pegged to the U.S. dollar, they are designed not for speculation but for stability. They move like crypto but behave like cash. In a region where remittances are a lifeline and cross-border trade is daily survival, stablecoins could slash costs, bypass chokepoints, and finally democratize money.

Platforms like Bitt Inc. (Barbados) are already building CBDC and stablecoin infrastructure to tackle these challenges. One example: CaribDollar (Carib$) a stablecoin developed by Abed Ventures Inc. of Barbados in collaboration with a German team was announced as a pan-Caribbean digital payment settlement system, initially launching in Barbados and Jamaica. (

Imagine a Bahamian fisherman paying a supplier in St. Lucia in seconds, at almost zero cost, without begging a correspondent bank in New York for permission. Or remittances from the U.S. or Canada arriving instantly in a wallet across the Caribbean, with no Western Union skimming off 5 %. Stablecoins could make that reality if only the rules allowed it.

Regulatory Reform – The Key to Unlocking the Future

The problem isn’t technology it’s law. Current CARICOM banking legislation confines legal tender strictly to central bank–issued money. As the ECCB underscores: “the Eastern Caribbean (EC) Dollar, together with its digital form, DCash, remains the sole currency which bears the status of legal tender in the ECCU.” Bitcoin and other cryptocurrencies lack that status. Stablecoins, too, are not recognized as legal tender at least not yet.

CBDCs like the Bahamas’ Sand Dollar (launched 2020), ECCU’s DCash (pilot started 2019), and Jamaica’s JAM-DEX (2022) were intended to usher cash-based economies into the digital age but uptake remains limited. In many cases, CBDCs have devolved into vehicles for state payouts rather than tools for everyday business or consumer use, according to studies released by the Bank for International Settlements.

But what if the rules changed? What if CARICOM nations distinguished between volatile cryptocurrencies and regulated stablecoins, enabling approved issuers to mint and redeem digital dollars under central bank oversight? What if compliance mechanisms were built in, rather than feared?

There are models to emulate. Hong Kong passed a Stablecoins Bill in May 2025, licensing stablecoin issuers under strict AML and governance standards. Singapore finalised its regulatory framework in late 2023, mandating full reserve backing. CARICOM could chart its own path tailored to regional needs.

A Battle Between Fear and Freedom

Right now, the Caribbean stands at a crossroads. On one side: the old guard, a fragile, fee-driven banking system shackled to foreign correspondents. On the other: a chance to adopt a new, stable, efficient, inclusive digital payments architecture.

The real choice isn’t between Bitcoin anarchy and banking monopoly, it’s between continued dependency and cautious liberation. A system built for Washington’s compliance officers, or one designed for Caribbean people.

Stablecoins, regulated, overseen, transparent, they’re not the enemy of financial stability; they’re its tool. But without bold regulatory reform, and without governments carving out a legal space for stablecoins, the region will remain trapped: paying excessive fees, excluded by design, and waiting for permission to transact.

Banks may  well  insist this is impossible. Correspondents will whisper it’s risky. But the truth is stark: the Caribbean cannot afford to let fear dictate its financial future. And then there is the US, its hard to imagine the influence of US policy decision making not exercising a pivotal influence on the regions financial industry.

Will CARICOM seize the moment, write its own rules of money, and embrace a borderless economy? Or continue to play by rules written elsewhere watching a liberated future slip further away?