The Central Bank of Jamaica (BOJ) has released the first batch of its own digital currency, CBDC. This was announced on August 10. The project continues the developments announced in December in the field of digitalization of the economy by the state. The trial has now issued 230 million digital JMDs, which equates to approximately US $ 1.49 million.
Trials of the use of Jamaica’s CBDC continue through December. According to the Minister of Finance of the country, the project of the central bank’s own digital currency, CBDC; will be part of the state’s program to create a digital economy and will allow Jamaica to become one of the leading states in the development of its own analogue of cryptocurrencies. He also confirms that JMD is not a cryptocurrency; businesses in Jamaica allowed to use JMD for payments and storage, without charging any fees.
The minister also confirmed the need for legal support for a new type of state currency; which will adopted by the end of the financial year.
To use JMD, citizens will need a special wallet, the procedure for obtaining which will be very simple. So, users of the state cryptocurrency will be able to freely convert funds and transfer them between their usual accounts and CBDC wallets; and consumers will also have access to an application that will allow them to make transactions at any convenient place and at any time.
Jamaica started developing its own CBDC in early 2020; and the first stage of testing supposed to begin this May. Later, without explanation, the dates postponed to August. The digital currency marketed in partnership with eCurrency Mint, an Irish startup. The CEO of eCurrency Mint describes CBDC as the most dynamic and growing in the world.
The name, logo and slogan of the Jamaican currency developed through a competitive process and will soon be presented to citizens.
Accelerating the transition to a digital society
The Jamaican government considers an accelerated transition to a digital society and economy vital to the recovery of the economy after the COVID-19 pandemic. So, the government said the expected benefits of CBDC include increased financial inclusion; as it will provide another, more readily available means of making payments; and for institutions where citizens make deposits, the opportunity to improve cash management processes and costs.
According to the financial representatives of the country; this approach will make it possible to cover the majority of the population with financial and banking services. This will solve the problem of the availability of banking services; since all financial transactions can be carried out through their own smartphone.
Jamaica opted for the “hybrid” CBDC model. The central bank issues currency to financial firms, which then provides it to customers in retail form. Not only banks, but broader depository institutions and PSPs will be able to offer retail accounts to customers to use the CBDC. Bank of Jamaica says the process of opening such accounts will be “much easier” than opening a standard bank account with simplified KYC requirements.
El Salvador accepts Bitcoin, Jamaica issues CBDC. We will hear more and more news of this kind, this is a natural process of integrating new instruments into the existing banking system and economy. Bitcoin and state cryptocurrencies are just a fraction of the potential of the technology, blockchain and smart contracts will radically change the approach to solving the problems of the state and business, making the processes more economical, transparent and efficient.