The Caribbean has taken a significant step towards financial integration with the launch of a pilot programme designed to enable instant cross-border payments in local currencies. The CARICOM Payment and Settlement System (CAPSS), now entering its testing phase across 11 Caribbean jurisdictions, could transform regional banking, lower transaction costs and strengthen trade between island economies.
The initiative, developed by Caribbean central banks in cooperation with the African Export-Import Bank (Afreximbank), represents one of the region’s most ambitious financial infrastructure projects.
It aims to address longstanding difficulties surrounding international payments, particularly the region’s dependence on US dollar transactions.
Breaking the dollar dependency
Businesses conducting transactions between Caribbean countries frequently encounter banking charges, currency conversion costs and delays.
Even payments between neighbouring islands can require intermediary banks and conversion through US dollars.
CAPSS is designed to allow businesses and consumers to send and receive payments directly in their respective domestic currencies.
Although settlement arrangements between central banks may continue involving US dollars, customers would no longer necessarily require dollar-based transactions.
Eleven jurisdictions enter the pilot
The initial programme involves the central banks of Barbados, The Bahamas and Trinidad and Tobago, together with the Eastern Caribbean Central Bank, which serves eight Caribbean economies.
The system builds on a successful February 2025 trial involving Barbados and The Bahamas, during which a cross-border payment was completed without using US dollars as an intermediary.
Regional banking authorities expect the programme to improve payment efficiency and strengthen economic cooperation.
Inspired by African financial innovation
CAPSS is modelled on the Pan-African Payment and Settlement System (PAPSS), developed to facilitate cross-border payments across Africa.
The cooperation with Afreximbank illustrates expanding financial relationships between African and Caribbean economies.
Future plans include connecting the two regional payment networks, potentially allowing businesses to conduct transactions more efficiently across the Atlantic.
Small businesses could benefit
The initiative may prove particularly valuable for small and medium-sized enterprises.
International payment fees can represent a substantial proportion of smaller transactions, discouraging regional commerce.
According to International Monetary Fund estimates cited in recent reporting, trade between CARICOM members accounts for approximately 8% of the region’s total goods exports.
Reducing payment barriers could encourage businesses to expand into neighbouring markets.
A new chapter for Caribbean finance
Despite its potential, CAPSS remains in the pilot stage, with wider implementation dependent on technical testing, regulatory coordination and participation by financial institutions.
Central bank governors are expected to review further progress in November.
If successful, the system could strengthen Caribbean financial independence and demonstrate how regional payment infrastructure can support trade, competition and financial inclusion.
NewsHub Finance | Caribbean Finance | 22 October 2026
The Caribbean has taken a significant step towards financial integration with the launch of a pilot programme designed to enable instant cross-border payments in local currencies. The CARICOM Payment and Settlement System (CAPSS), now entering its testing phase across 11 Caribbean jurisdictions, could transform regional banking, lower transaction costs and strengthen trade between island economies.
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