The central bank of Jamaica will launch a pilot program to test its own digital currency in August this year, with the assistance of Irish tech firm eCurrency Mint. The regulator is currently preparing the infrastructure for CBDC testing.
Although back in March 2021, the Central Bank of Jamaica promised to begin testing its digital currency (CBDC) in May. Be that as it may, the regulators should complete tests before the end of this year. After that, the bank will gradually move to a full-scale launch. Earlier, Jamaican Finance Minister Nigel Clarke said that the full launch of the CBDC will take place in 2022.
Bank of Jamaica Governor Richard Byles revealed that eCurrency Mint was selected as the technology provider for the digital Jamaican dollar and its high level of security. Among other solution providers who applied to participate in the project back in July 2020. of the year. Byles said that before starting testing the state digital currency, the Central Bank carefully studied its technical aspects in the regulatory sandbox.
The first participant in the pilot will be the largest financial financial group in Jamaica – the National Commercial Bank (NCB).
Digital currency will expand public access to financial services
The digital currency will differ from private cryptocurrencies. It only be sold to licensed commercial banks, depository institutions and payment systems authorized by the Bank of Jamaica.
According to the Governor of the Bank of Jamaica, the digital currency of the Central Bank will function according to a two-tier scheme. Financial institutions will act as intermediaries between the central bank and consumers, be they retail or corporate clients. As legal tender, digital currency will complement the use of banknotes and coins issued by the central bank. Banks will be able to issue digital Jamaican dollars pegged to the state currency in a 1: 1 ratio. They will be kept in customer accounts. Unlike paper money, it is an instant and very efficient payment method.
From September to December, the number of commercial banks participating in the project will increase. After successful testing of the state stablecoin, its full launch will take place. Byles believes the digital Jamaican dollar will increase people’s access to financial services. For this, the central bank considers it necessary to connect local telecommunications companies and retail payment systems to the project.
In addition, the regulator plans to provide simplified access to accounts in CBDC without mandatory KYC requirements. This should help to attract a wider range of users, especially from the unbanked population.
Digital Jamaican dollar will accelerate payment infrastructure modernization
CBDC advocates in the Jamaican government believe that the emergence of the new instrument will accelerate the modernization of the entire payment infrastructure of the island nation. In addition, the Jamaican government considers an accelerated transition to a digital society and economy vital to the recovery of the economy from the COVID-19 pandemic.
One of the first countries to introduce their own digital currency was the Bahamas – the official launch of the Sand Dollar took place in October 2020. In April, the Central Bank of Saint Kitts and Nevis also launched a government cryptocurrency called DCash.