Curcaçao and Sint Maarten consider change

Curaçao and Sint Maarten could soon switch from the Netherlands Antilles guilder to the Caribbean guilder.

Will the Caribbean guilder replace the Netherlands Antilles guilder by 2025, that is the question posed by the Centrale Bank van Curacao en Sint Maarten or Central Bank of Curaçao and Sint Maarten.

The changeover to the guilder currency is one of the six objectives involved in the CBCS 2025 strategic plan. Specific details of the strategic plan were not publicly available at the time of writing, but according to the CBCS website, “Technological advances, climate change and developments triggered by the global COVID-19 pandemic and its impact on the economy and the financial sector lead to changes in the scope and complexity of central bank operations and generate new risks that have yet to be identified.As a result, these banks face fundamental changes and are challenged to adapt in order to face these new realities.

The website further explains, “The CBCS 2025 Strategic Plan is the result of extensive analysis. It was preceded by an in-depth survey of various of its external stakeholders at the end of 2020. The CBCS organization as a whole was actively involved in formulating the plan through a consultative and participatory approach.

The plan to change one guilder for another has been under consideration since 2010. No action has yet been taken due to a discussion on a possible introduction of the dollar or the euro in the two islands. The former Netherlands Antilles entities Bonaire, Sint Eustatius, and Saba have each dollarized, adopting the US dollar as their official currency. Aruba, another former part of the Netherlands Antilles, issued the Aruba guilder when it left the Netherlands Antilles in 1986. The Caribbean guilder and the Netherlands Antilles guilder are each legally pegged to the US dollar at a rate of 1 .79.

Curaçao and Sint Maarten became “landen” or constituent countries of the Netherlands in 2010, following the dissolution of the Netherlands Antilles. West Indian guilder banknotes and coins ceased to be produced in 2018, pending currency change. Due to this decision by the central bank, it is expected that the islands may run out of physical coins and banknotes within a few years. If this turns out to be true, an alternative currency such as the dollar or euro may need to function as a parallel currency.

The Antillean guilder circulates in coins of 1, 5, 10, 25 and 50 cents and of 1, 2 1/2 and 5 guilders. Banknotes circulate in denominations of 10, 25, 50 and 100 guilders. Regional birds are the dominant vignette on banknotes.

The Netherlands Antilles guilder has continued to circulate since the dissolution of the Netherlands Antilles. Another possible currency proposal involves Curaçao and Sint Maarten issuing a Caribbean guilder pegged to the US dollar. This proposal has been delayed due to negotiations on a new central bank.

It has been proposed that the 2 1/2 guilder coin and banknote denominations of 25 guilders circulating from the Netherlands Antilles guilder series should not be reissued, while banknotes in denominations of 20 and 200 guilders will be added to what will be issued for circulation.

The Central Bank of Curaçao and Sint Maarten succeeds the Bank of the Netherlands Antilles. The central bank is chaired by a president chosen by the prime ministers of the two islands. A supervisory board is also appointed.

Following the dissolution of the Netherlands Antilles, Bonaire, Sint Eustatius and Saba became special municipalities similar to other municipalities in the European part of the Kingdom of the Netherlands. Curaçao and Sint Maarten have chosen an option through which the islands have acquired greater autonomy. Together with the Netherlands and Aruba, the islands comprise the four self-governing countries of the Kingdom of the Netherlands.