Bravenewcoin: Banks abandon the Caribbean, local bitcoin exchange experiences 33% increase in users every month since February

According to Madame Lagarde, at least five Caribbean countries were ‘de-risked’ as of this May, with 16 or more international banks withdrawing their correspondent banking relationships.

This land-locks the money on some of these island nations, cutting residents and businesses off from foreign trade. Belize is most affected by the trend, but most of the Caribbean is deeply affected.

Compounding the problem is that these smaller, poorer countries depend on international trade the most.

Madame Lagarde mentioned that such countries are “especially vulnerable,” with citizens in them often depending on remittances from family members who work abroad.

These citizens already had minimal access to financial services under the best of circumstances, now they are completely cut off in some areas.

The poorer a country is, the more likely that banks will leave due to low profits. The more banks that leave, the less trade that can be done there, and the poorer the country becomes.

It’s a vicious cycle that, so the theory goes, can spread like cancer from neighbor to neighbor in regions like the Caribbean.

The IMF director used her speech to call on regulators in financial centers, both large and small, to do more to help banks maintain these relationships. It’s a hard sell, however, since the banks waited until their relationships were unprofitable. Spending money fighting regulations may be less expensive than retaining banking relationships in the region.

His view of the problem mirrors that of the IMF. However, it’s more nuanced, according to Abed. It’s more to do with perception and relationships, rather than profits alone: “What the Caribbean is really suffering from is a misperception associated with the ‘offshore’ industry, and a lack of economic and political clout.”

“When you combine a dearth of financial services with heavy dependence on transfers of wealth from abroad,” he concluded, “you end up with an exploitative system that bitcoin and blockchain technology are primed to disrupt.”

Cheerfully up for the challenge, Abed told BraveNewCoin that his company will be able to, “Unequivocally,” handle all of the shortfalls from lost bank business.

“The more foreign exchange Bitt brings into the region’s financial ecosystem,” he explained, “the more excited central banks, governments, and regional bankers become, and the more the Caribbean grows into a bitcoin and blockchain hub.”

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