A Caribbean Settlement Network: Can Blockchain Ease Intra-regional Trade in the Caribbean?
This paper analyzes the potential effects that distributed ledger technology (DLT) could have on intraregional trade volumes in the Caribbean. Using a two-step panel regression gravity model for 15 CARICOM countries, the analysis finds that non-tariff barriers, such as distance and culture, bilateral exchange rates, transfer fees, and required documentation, have negative effects on trade. There are a rising number of pilot projects across the world that apply DLT for payment settlemetns and trade facilitation. These are starting to generate encouraging evidence that the application of DLT could indeed help reduce the prevalence of some of these NTBs and thus promote trade.