BITT

FinTech for public needs

Bitt’s digital currency management services are helping governments transition to more efficient and inclusive financial systems.

ABOUT BITT

Summary

  • Founded in 2013
  • HQ in Bridgetown, Barbados
  • FTEs: 51-100
  • Key clients/partners: The Central Bank of Nigeria, The Eastern Caribbean Central Bank, The National Bank of Belize, TASCOMBANK
  • Key executives:
    • Brian Popelka, CEO: 14 years of experience in E-commerce at Overstock.
    • Jim Martin, CTO: 25+ years experience in software development, architecture and management.
    • Simon Chantry, CIO and co-founder: background in nuclear engineering, member of OECD Blockchain Advisory Board and WEF Digital Currency Governance Consortium.
    • Patrick Hidalgo, CFO: 15+ years of experience in financial markets. 

profile

Central Bank Digital Currencies (CBDCs) refer to digital money which is the direct liability of a given central bank. For citizens, owning CBDC units will feel like having a checking account with the central bank (as opposed to a commercial bank). For central banks, CBDCs hold promise for broadening control over financial systems, increasing macro stability and efficiency, and promoting financial inclusion. 

CBDCs are open to several design questions: for example, should they leverage conventional payments infrastructure or distributed ledger technologies? Bitt, a financial technology startup, offers expertise and technology so that central bankers can answer such questions through experimentation and experiential learning. At the core is its Digital Currency Management System (DCMS) that enables central banks, financial institutions, and governments to deploy CBDC and stablecoin infrastructure. Bitt also facilitates at different points of CBDC deployment. For example, to specify CBDC technical requirements, central banks can trial DCMS features using Bitt’s “CBDC Sandbox” or “CBDC Pilot” services. 

Bitt’s offering is timely. A 2021 Bank of International Settlements survey found that 86 percent of central banks are actively researching CBDCs, 60 percent are experimenting and 14 percent are piloting. The pandemic sharpened both a shift away from physical notes and the urgency of quickly responding to financial instability, boosting CBDC consideration. Even before COVID-19, governments reasoned that CBDCs could buoy monetary sovereignty against foreign currencies and cryptocurrencies.

plans for 2022

  •  Expanding into new markets
  •  Growing the team

who should connect with this company

  • Central Banks
  • Financial Institutions
  • Public Tax Authorities
  • Digital Government Agencies and Departments

case study

The Caribbean faces twin problems of costly and slow cross-border transactions and a large unbanked population. To address this situation, in 2019 the Eastern Caribbean Central Bank (ECCB) partnered with Bitt to develop and deploy the digital version of the Eastern Caribbean dollar, DCash. The aim was for DCash to underpin the region's retail payment system, especially for unbanked residents, merchants requiring low cost payments infrastructure, and diasporans seeking cheaper remittance channels.

Image from Ledger Insights;

DCash: motivations, challenges, and lessons from the first monetary union CBDC pilot; Central Bank Digital Currency Partner: Bitt; DXCD, The Eastern Caribbean Central Bank Digital Money Is Being Readied For Production

Bitt built DCash on Hyperledger Fabric, an open source, permissioned blockchain hosted by The Linux Foundation. Bitt faced some deployment challenges, from relatively low internet penetration to Eastern Caribbean residents being wary of using a “cryptocurrency”. The pandemic also caused Bitt to deploy technology remotely. However, Bitt and the ECCB surmounted these challenges, for example through an extensive educational campaign to allay residents' concerns. 

DCash was launched as an invitational pilot in March 2021. A bank account is not necessary to obtain a DCash Wallet. There are no minimum balances or payments amounts and no payment fees, including for remittances. Transactions are stored on Hyperledger Fabric, but financial institutions are responsible for personally identifiable information. DCash facilitates instant payments across participating countries in the Eastern Caribbean Currency Union (ECCU, participating countries are Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Vincent and the Grenadines and St. Lucia). The next step is expanding to Anguilla, the last remaining ECCU member country, and enhancing application features.

stateup view

Bitt’s story is still developing, but it looks to us like one of accumulated advantage (see the Matthew Effect). According to the Atlantic Council’s CBDC project tracker, Bitt is responsible for six of the seven “launched” CBDC projects globally. It got its start independently launching a blockchain-based Barbadian dollar, mMoney, in 2016. Barbados was about 80 percent cash reliant at the time; adoption grew and regulatory approval came when the benefits of digitizing transactions became apparent. 

This was the springboard for conversations with the ECCB, giving it multiple country deployments in one go. In fact, the ECCB initially said it would not outsource its CBDC development. It relented because its CBDC shares with Bitt’s work in Barbados a focus on digital financial inclusion in emerging economies. 

The Central Bank of Nigeria cited Bitt’s experience with the ECCB as a key reason it won the contract to develop Nigeria’s CBDC, the e-Naira. If Bitt can manage it––early evidence suggests some difficulty with adoption––successful deployment in Africa’s largest economy and population will only help its reputation amongst countries with significant unbanked populations; as a Bitt VP notes, these countries have the highest appetite for CBDCs. 

Another hurdle is that CBDCs are suspected to be government surveillance tools. This is less of a concern with token-based CBDCs like DCash, which allow for anonymous transactions. There will likely be more resistance with identification-based systems like the e-Naira.

GET ACCESS TO THE FULL REPORT

Enter your email to download the full Stateup21 report: