Although the Dominican Republic’s GDP contracted by 6.7% in 20201 amidst the COVID-19 pandemic, the International Monetary Fund (IMF) has praised the island country for its dynamic economy, policy response to the crisis and recovery potential.2 One of the fastest-growing economies in Latin America and the Caribbean,3 the Dominican Republic has increasingly digitalized, with an internet penetration rate of 79%4 and ambitious plans to expand digital access. The Inter-American Development Bank IDB has granted the Dominican Republic a USD$115 million loan toward improving connectivity,5 which will dovetail well with the accelerated adoption of digital banking and other innovative solutions. In February 2021, over 820,000 mobile transactions at an accumulated DOP 799 million (approximately USD $14 million) were made, a 16.6% year-on-year surge.6
Despite the Dominican Republic’s progress and optimistic outlook, poverty7 and income inequality persist. Forty percent of the population lives in poverty and a 2019 survey by the central bank revealed that 53.69% of the population did not have a bank account.8 The government has instituted multiple temporary and permanent social programs to ensure that the COVID-19 pandemic does not deepen poverty,9 and digitalization will be instrumental in promoting financial inclusion and strengthening the economy.
The 2021 Dominican digital agenda focuses on financial innovation and digitalization of the economy and society. Although the Dominican fintech ecosystem is small, the country’s robust economy and continuous digital transformation could encourage new entrants and foster competition.
Financial Regulatory Authorities
The Central Bank of the Dominican Republic is the country’s central bank and is responsible for regulating the monetary and banking system.
The Superintendency of Banks (SB) supervises and regulates the banking sector.
Law, Policy and Regulations
Financial Innovation Hub, 19 May 2021
In a virtual conference, central bank Governor Héctor Valdez Albizu announced that the bank was developing a financial innovation hub that would operate as a sandbox for private sector initiatives. Valdez noted that, “These innovation hubs already exist in countries such as the United Kingdom, Israel, Chile, and Mexico, to name just a few, and they have proven to be a very useful platform for exchanging information and experiences, which serves both the regulator as well as those regulated to jointly promote novel ventures that benefit the population, and support equitable access to financial services.”10
2030 Digital Agenda, May 2021
The 2030 Digital Agenda was released by the Presidential Office for the Digital Transformation of the Dominican Republic, which was established by President Luis Abinader’s Decree 71-21, issued in February 2021. The agenda centers on five axes: governance and regulatory framework, connectivity and access, digital education and capabilities, digital government and digital economy, all of which are underpinned by two overarching axes—cybersecurity and technological innovation. The agenda envisions a 2030 where the Dominican Republic is connected, the digital divide has closed, and technology is harnessed towards the achievement of sustainable economic and social development. Toward strengthening the digital economy, the agenda outlines several objectives, including to:
- Strengthen the national development of ICT tools and solutions that support all economic sectors
- Boost digital business and e-commerce to promote productivity and competitiveness of companies
- Stimulate and facilitate the development of technology-based financial services
- Strengthen the legal and regulatory framework to facilitate digital transformation processes11
1. “The World Bank in Dominican Republic.” The World Bank, 10 June 2021. https://www.worldbank.org/en/country/dominicanrepublic/overview
2. “IMF Staff Completes 2021 Article IV Mission to the Dominican Republic.” International Monetary Fund, 06 May 2021. https://www.imf.org/en/News/Articles/2021/05/06/pr21122-dominican-republic-imf-staff-completes-2021-article-iv-mission-to-the-dominican-republic
3. “The World Bank in Dominican Republic.” The World Bank, 10 June 2021. https://www.worldbank.org/en/country/dominicanrepublic/overview
4. Chevalier, Stephanie. “Statistics and facts about internet usage in the Dominican Republic.” Statista, 08 March 2021. https://www.statista.com/topics/6244/internet-usage-in-the-dominican-republic/
5. “Dominican Republic to improve digital connectivity with $115 million IDB loan.” Inter-American Development Bank, 13 July 2021. https://www.iadb.org/en/news/dominican-republic-improve-digital-connectivity-115-million-idb-loan
6. Wirtz, Nic. “Fintech thriving in CentAm but legislative support needed.” BNamericas, 15 April 2021. https://app.bnamericas.com/article/section/all/content/xwwvjsqov-fintech-thriving-in-centam-but-needs-legislative-support
7. “Dominican Republic.” United Nations World Food Programme. https://www.wfp.org/countries/dominican-republic
8. “53.69% of Dominicans don’t have a bank account; poll.” Dominican Today, 24 March 2021. https://dominicantoday.com/dr/economy/2021/03/24/53-69-of-dominicans-dont-have-a-bank-account-poll/
9. Sans, Mariana and Pamela Madrid. “Four Charts on the Dominican Republic’s Crisis Response and Recovery.” International Monetary Fund, 28 July 2021. https://www.imf.org/en/News/Articles/2021/07/08/na071221-four-charts-on-the-dominican-republics-crisis-response-and-recovery
10. “Central Bank announces the creation of a Financial Innovation Hub.” Dominican News, 20 May 2021. https://dominican.news/money/central-bank-announces-the-creation-of-a-financial-innovation-hub/
11. “AGENDA DIGITAL DE LA REPÚBLICA DOMINICANA 2030.” Digital Transformation Cabinet, May 2021.
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Last updated: November 2021