Overstock revealed Friday it invested $4 million into a blockchain-forward financial technology firm in the Caribbean. The announcement, made in Barbados and attended by principals from the island’s company Bitt and Overstock, enters in a big move by Overstock into the space. It’s involvement had largely been focused on innovation through its t0 project.
“A major impediment to economic advancement around the world is the fact that the vast majority of humans are unbanked,” Overstock Chief Executive Patrick Byrne said. “Yet mobile penetration in some countries exceeds 100 percent. Bitt has a vision for the Caribbean of frictionless mobile cash, beginning with central banks transparently issuing digital fiat which is then exchanged on a blockchain.”
Bitt, Inc. launched in February a Barbadian digital currency designed to function like Bitcoin and be backed by the Central Bank of Barbados. It called it the Barbados Digital Dollar. Bitt’s overarching goal is to digitize fiat currencies in the Caribbean and place them on a blockchain for easier trading. If it succeeded in a short period of time, it would likely put an historically behind-the-times banking and financial industry ahead of the times.
In December 2015, Byrne announced Overstock’s t0 at an Inside Bitcoins conference in San Diego. Byrne hopes his platform, designed to reinvent the way securities and other financial instruments are traded on Wall Street, will revolutionize the way securities are traded with blockchain technology. He endures steep competition from the likes of R3.
“This system is transparent and reduces costs we believe 80%, maybe as much as 90%,” the CEO said. “It eliminates settlement-based mischief.” Byrne says the system has been thoroughly tested. The initial application was filed in April. He spoke of the overall process during his speech.
“We have now built the technology and the system [for] crypto-trading,” he said. “The SEC has been studying it for months and months and as of Friday its been blessed with holy water by the SEC.” Bitt Inc’s Barbadian Digital Dollar represented the first blockchain-based digital money in the Caribbean.
At the time, co-founder and CFO Oliver Gale said:
The Barbadian Digital Dollar is easy to send to anyone, with a few gestures on your mobile device. Commerce can be done with less friction, payment(s) can be made instantly, auditors can cryptographically verify the signatures with unparalleled security.
CEO Gabriel Abed added: “One of our digital Barbados dollars is equivalent to one dollar issued by the Central Bank of Barbados. What we do is allow people to do more with their money.”
Bitt Inc’s Barbadian Dollar is designed to function in a distributed manner, like Bitcoin’s blockchain. The company provides services like an exchange, mobile wallet and remittances. The company is also credited with founding the first bitcoin exchange in the island nation.
A well-publicized report surfaced in December 2015, in which two Barbadian economists suggested the Central Bank of Barbados hold a small portion of Bitcoin in its foreign reserves. The economists stated:
Within recent years, the proportion of digital transactions done using digital currencies has grown significantly. As a result, it is possible that digital currency could become a key currency for settling transactions.
The complete working paper can be read or downloaded here. [PDF]
Featured image from Shutterstock.