Innovation at the Central Bank of the Dominican Republic

Posted on Jan 22, 2021 by Fabiola Herrera, Deputy Manager of Systems and Technological Innovation and Angel González, Payment Systems Department Director, Central Bank of the Dominican Republic

I. Introduction

To put the words “central banks” and “innovation” in the same sentence might seem bold to many. However, in this post-pandemic digital era, it is not only advisable but also necessary.

Central banks are the guardians of the economic and financial stability of countries, and are also responsible for ensuring the proper functioning of national payment systems. They are additionally the reference for all financial entities in their countries. Their provisions are respected and complied with by their regulated parties. The path taken by central banks is followed by their financial system.

At a time when the world is becoming more digital, when new players are emerging, when the issue of money is being questioned and the way it is being used has changed, the involvement of central banks in digital innovation issues is more relevant than ever. Although everything is evolving, economic and financial stability as a public good is a guarantee of balance and growth for countries.

In addition to the above, there is one aspect of central banks' mission and objectives that touches deeply on the human fiber: financial inclusion. This is no accident. Access to and use of financial services by people at the base of the pyramid leads to greater opportunities for wealth generation, advancement and entrepreneurship. The sum of all these efforts will be reflected in the collective growth that is, in the end, the progress of a country.

II. The Digital Era and Financial Ecosystems

2.1. Evolution of the Ecosystem

The Dominican Republic is one of the countries with the highest economic growth in the Latin American region, showing between 2005 and 2019 an average GDP growth of 5.8 percent, driven by good management of monetary, exchange and financial policies by the Central Bank, as well as a modern, safe and efficient payment system.

In this context, the banking business has evolved in line with ...

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