Caribbean correspondent banking stands at a critical crossroads, according to Antigua News Room, as sweeping regulatory developments in the United States and a decade of accelerating financial de-risking converge to reshape the region's access to the global financial system.
In July 2025, the United States enacted the GENIUS Act, establishing the first federal framework for payment stablecoins. By February 2026, the Office of the Comptroller of the Currency had issued its first comprehensive rule to implement it. Visa has begun settling international transactions in stablecoins, reaching an annualised run rate of approximately US$4.5 billion by January 2026. The U.S. Treasury has projected that stablecoin supply could approach US$3 trillion by 2030, while EY estimates these instruments could carry between five and ten percent of all cross-border payments by then — between US$2.1 and US$4.2 trillion annually.
These developments arrive alongside more than a decade of correspondent banking attrition that the Caribbean region has confronted through sustained diplomacy and advocacy. This commentary — the second in the Caribbean Banking Series by finance and business strategist Fletcher St. Jean, MBA, following "The Cost of Money in the ECCU" — is offered as a contribution to ongoing work led by the Eastern Caribbean Central Bank, the Central Bank of The Bahamas, the Bank of Jamaica, the Caribbean Development Bank, the Caribbean Association of Banks, CARICOM, and member governments since at least 2015.
The stakes, St. Jean argues, extend well beyond banking operations. The ECCB's 2026–2031 strategic plan, launched in March 2026 under Governor Timothy Antoine's "Big Push," challenges the Eastern Caribbean Currency Union to double its GDP within a decade — approximately seven percent annual growth against a current trajectory the Governor himself describes as closer to three percent. The Caribbean Development Bank's Strategic Plan 2026–2035, framed by President Daniel Best as a "decade of decision," sets a parallel regional ambition. Both plans rest on a foundational assumption: that the region is, and remains, bankable.
De-risking puts that assumption directly in question. As Governor Antoine has argued, without stability there is no confidence, and without confidence there is no investment and no sustained growth. Foreign direct investment does not flow readily into jurisdictions whose banks may struggle to clear U.S. dollars or repatriate returns. A correspondent panel that is thinning, costlier, and more concentrated is not merely an operational problem — it raises the cost of capital and weakens investor confidence, acting as a drag on the very growth roadmaps the region has set for itself.
The roots of the problem are well documented. In November 2015, the World Bank published its first comprehensive study of correspondent banking withdrawal from emerging markets, finding that de-risking — driven by rising compliance costs and the risk aversion of large global banks — was reducing financial access across entire regions. The burden fell hardest on small economies, with the Caribbean and the Pacific identified as the most severely affected.
In a correspondent relationship, the respondent bank — the Caribbean institution — holds an account with a larger correspondent bank abroad in order to access the international payment system, settle in U.S. dollars, and move funds across borders. When a correspondent withdraws, the respondent does not lose a vendor; it loses its road to the rest of the world.
By 2017, the Caribbean Association of Banks found that 21 of 23 surveyed banks across 12 countries had lost at least one correspondent relationship, with the Eastern Caribbean, Suriname, and Belize bearing a disproportionate share of the burden. The Financial Stability Board warned that the decline risked becoming a systemic problem for the region.
A decade of advocacy has slowed the trend but has not reversed it. St. Jean argues that the more pressing question for bank boards is no longer simply how to defend existing relationships, but what the action plan would be in the event of a rapid, correlated exit of remaining correspondents — a scenario from which there may be no quick recovery.
Three mechanics drive correspondent withdrawal. The first is what compliance officers call KYCC — knowing your customer's customer. Under current expectations, a correspondent must be satisfied not only that it knows the respondent bank, but that the respondent adequately knows and monitors its own customers, including downstream institutions. Where a respondent's customer-due-diligence program has gaps — incomplete beneficial-ownership data, uneven transaction monitoring, or weak documentation on higher-risk accounts — the correspondent inherits that exposure. Such gaps are therefore not a local problem; they are precisely the factor that drives a correspondent toward the exit.
The second is the economics of enhanced due diligence on low-volume relationships. The cost of onboarding, monitoring, screening, and periodically reviewing a respondent is largely fixed and does not diminish because the respondent is small. When that fixed cost is spread across the modest transaction volumes of a small Caribbean bank, per-transaction economics deteriorate rapidly.
In her September 14, 2022 testimony before the U.S. House Committee on Financial Services, Barbadian Prime Minister Mia Mottley described the scale of the problem with precision: forty countries had lost more than 40 percent of their correspondent relationships, twenty — many in the Caribbean — had lost over half, and on the Bank for International Settlements' count, eight countries could not receive payments at all while four could not send. St. Jean notes that in most cases this occurred not because investigators had found material money laundering in the affected banks, but because the fixed cost of additional monitoring — much of it triggered by FATF and FATF-style listings — falls disproportionately on small economies.
