Caribbean seeks financial autonomy with new joint currency for Curaçao and St Maarten

The Dutch Caribbean islands of Curaçao and St Maarten are set to introduce a new joint currency in 2024 as a show of their independence after more than a decade of functioning autonomously, without the influence of the Netherlands.

These developments have been reported by banks in the region as the Caribbean guilder is expected to replace the Netherlands-Antillean guilder as the legal tender of the two islands, as mandated under the remit of the constitutional reforms undertaken by the region in 2010.

Through these reforms, Curaçao and St Maarten managed to alter their political structure in a manner which is facilitating the changes being introduced to their currency now.

Queen’s Image to be removed from the Eastern Caribbean Currency

This decision has been preceded by the Eastern Caribbean Central Bank’s bid to have the Queen’s Image removed from the Eastern Caribbean (EC) currency. The Eastern Caribbean Central Bank, which is based in St Kitts and Nevis, stated that its Monetary Council had reviewed the decision and responded positively to the request, having approved it.

The Eastern Caribbean currency has been in circulation since 1965 and is the successor of the British West Indies Dollar. Grenada, St Vincent and the Grenadines, St Kitts-Nevis, Antigua and Barbuda, Dominica, Montserrat and Anguilla are all nations to which the Eastern Caribbean Central Bank acts as the central financial authority, making it the central bank for these islands.

An advertisement from the Eastern Caribbean Central Bank highlighted the following, “The proposed replacement is an emblem which depicts the flags of ECCB member countries, this image provides more holistic reflection of the ECCU (Eastern Caribbean Currency Union)”.

Independence and Autonomy through currency

The decisions being made by the nations and financial authorities of the Caribbean are congruent with their goal of realigning their financial institutions and structure in a manner which reflects their Autonomy and independence from foreign influences.

Since many nations in the Caribbean maintain functional relationships with former colonizing nations or have deep ties with them, built out of their shared history, many in the region see the need for reforms which help the financial system of the region stand apart.

With the introduction of currencies which are tailor made for the nations of the Caribbean and facilitate effective economic exchange in the region, a significant shift from the previous norms is being noticed by observers of Caribbean economics.

It is also important to note that nations in the Caribbean are seeking avenues through which they can preserve and highlight the rich and unique history of the region, while also keeping the memory of its heroes and leaders alive.

One of the most important outlets for this need is the economy of the region and individual nations as well. Many in the Caribbean have felt the need for reforms which help the structure reflect the heritage of their nation or region, instead of that which has been offered to them by colonizing nations as a replacement.

The currency of the region is an integral part of the Image that is portrayed in this regard, not just to residents of the Caribbean but the entire world.

Thus, by bringing indigenous elements to the currencies being used in the region, governments and financial institutions are making an attempt to sideline the more recent influences of a foreign nature and reignite appreciation for the history, culture and unity of the region.

These are important steps for Caribbean islands such as Curaçao and St Maarten as they reinforce their sovereignty as an intellectual concept and help remind the people in the region of their true roots and history, beyond the colonial era.

Many have also taken a stronger stance to this particular debate, stating that the European influence on the region’s iconography has been overbearing and needed to be replaced with options more suited to local needs and expectations.

EC Dollar pegged to the USD

Since 1976, the Eastern Caribbean Dollar has been pegged to the US Dollar at a rate of XCD2. 7 to USD1. 00 and serves as the official currency of the Organisation of the Eastern Caribbean States (OECS).

The OECS was established in 1981 to maintain a balance between the trade policies of 10 islands in the Eastern Caribbean region, out of which, 8 use the currency actively.

Initially, the Eastern Caribbean Currency Authority pegged the Eastern Caribbean Dollar at 4.8 XCD to 1 GBP, as the currency had replaced the British West Indies Dollar.

Subsequently, the currency authority made the decision to peg the Eastern Caribbean Dollar to the US Dollar at a rate of 2.7 XCD to 1 USD in 1976. Following this development, the Eastern Caribbean Central Bank was established in 1983 and took over the responsibilities of the Eastern Caribbean Currency Authority, leaving the Eastern Caribbean Dollar pegged to the US Dollar.

The Eastern Caribbean Bank handles the economic stability and functioning of the region through carefully drafted policies which are meant to maintain the economic structure of the region while regulating liquidity, as is necessary.

One of the key decisions made by the bank is maintaining the viability of its currency by keeping it pegged to the US Dollar, thus ensuring that inflation is controlled to reasonable limits and prices for essential commodities can be maintained at stable levels.

Curaçao and St Maarten

Certain nations in the Caribbean have maintained legal tenders other than the Eastern Caribbean Dollar. Curaçao and St Maarten are prime examples of this as they are about to introduce a new currency in the second half of 2024.

This decision was made by the Central Bank of Curaçao and St Maarten last year, as delineated in its annual report. The new currency is expected to come with added security benefits and will be circulated along with the outgoing currency for a period of three months.

Another brilliant policy that is a part of this initiative is the ability of citizens to exchange the older currency for the newer one for a period of 30 years, without any difference in value, thus adding to the convenience on offer for the average citizen.