Business, Finance

PAPSS or Carib$ or both of them — where should the Caribbean go?

Despite the geographical proximity of CARICOM nations, high barriers to trade make close neighbours seem worlds apart. Transferring funds across the region is a slow, expensive and complicated process — a predicament which the CARICOM Single Market and Economy (CSME) aims to address.

Two proposed solutions aim to break down these barriers to cross-border fund movement in the Caribbean: PAPSS and Carib$.

PAPSS, the Pan-African Payment and Settlement System, is a financial market infrastructure enabling seamless transactions between African nations, championed by the African Export-Import Bank (Afreximbank). In 2023, CARICOM central bank governors agreed to support a pilot project called the CARICOM Payments and Settlements System (CAPSS). CAPSS will interconnect the region’s national settlement systems, enabling direct payment between Caribbean countries using their national currencies.

Carib$ is an asset-backed Complementary Currency, which maintains a stable value and is fully-convertible to Caribbean national currencies. As a Complementary Currency, Carib$ works alongside established national currencies and will form an effective tool to facilitate transfers of capital across economies, while also helping to buffer economies from negative shocks and prevent liquidity drenches. Carib$ is designed to fast-track the CARICOM region towards CSME and is being developed by the Barbados-based EUCC Inc. (Abed Ventures 2 Inc.).

While both PAPSS and Carib$ tackle the same problem, the solutions differ greatly:

1. Carib$ integrates into the existing financial landscape quickly and easily

In the CAPSS system, the CARICOM central banks would have to undergo an arduous and technologically challenging integration process, given CAPSS’ reliance on a central settlement system which must connect to all existing national settlement systems. As a consequence, the region’s central banks would have to invest significant time and capital to prepare their technology infrastructure, organisational processes and currency management frameworks for CAPSS integration. CAPSS notably requires central banks to fund daily FX settlements, placing pressure on the banks to manage the economy’s balance of trade.

Carib$’s Complementary Currency structure, by contrast, works in parallel with the region’s national currencies, and allows for cross-border transactions without disrupting the existing financial systems’ frameworks and processes. Its introduction will not require any significant up-front investment from central banks or other financial institutions.

Moreover, Carib$ is built on the Stellar network, a tried-and-tested public network infrastructure, operational since 2014. Stellar is trusted by millions worldwide and plays a major role in international payments innovation; evidenced by MoneyGram’s adoption of Stellar for its global remittance network.

Carib$ may also be directly integrated into the Caribbean’s emerging Central Bank Digital Currency (CBDC) ecosystems, such as Jamaica’s JamDEX or the ECCU’s DCash, using basic APIs. Connection to these payment systems would enable direct swapping of CBDCs for Carib$, fostering new utility and adoption.

2. Carib$’s Caribbean multi-stakeholder governance will align the solution with CARICOM’s economic development needs

The governance board for Carib$ has been purpose-designed to ensure that the system fosters sustainable economic development across the CARICOM region. A range of Caribbean public and private sector stakeholders, with an interest in regional trade and development, will have a voice in establishing the core parameters of Carib$.

By comparison, CAPSS’s governance board is composed primarily of financial sector stakeholders, leading to a narrower set of governance perspectives. Afreximbank also participates in CAPSS governance, giving non-Caribbean stakeholders a strong say in the region’s trade development.

3. Carib$ reduces the cost of regional payments substantially

The CAPSS system will make the US Dollar redundant as a medium for cross-border trade, as it enables direct exchange between any pair of Caribbean currencies. This US Dollar disintermediation should reduce the cost of cross-border transactions but does so at the cost of an additional overarching settlement system.

Carib$ goes one step further. Once a sufficient number of Caribbean businesses use Carib$, the resultant “ecosystem” will make currency exchange itself redundant. Instead, Carib$ will be continually transferred between users in the ecosystem to make and receive payments across the region, without the need to exchange for their national currency after each transaction. The technology notably offers near-instantaneous payment and settlement, while ensuring full compliance with national and international AML rules.

Taking this into account the use of Carib$ will likely be the cheaper and faster alternative for cross-border transactions, underpinned by a strong drive to move towards the CSME.


Both the CAPSS and Carib$ systems hold tremendous promise for the CARICOM region. The CAPSS system’s dependency on the legacy financial system, however, makes it a rather clumsy workaround. Carib$, by contrast, is a viable catalyst to usher in a new era in the CSME and close the gaps between Caribbean neighbours.