The central bank of Jamaica is to begin rolling out its central bank digital currency (CBDC) from August, becoming one of the first countries in the world to push a CBDC formally through its central bank.
According to local media reports, Bank of Jamaica Governor Richard Byles made the comments at a Rotary Club meeting last month, telling delegates the pilot phase will get underway from next month. The Bank of Jamaica is currently working on the CBDC in a regulatory sandbox environment, in preparation for the roll out.
The bank has partnered with eCurrency Mint as the technical partner for developing the CBDC, as part of a development project that has been in the works since July 2020.
Byles said that there would be an ongoing process of testing, before more banks are recruited to expand the pilot scheme towards mainstream rollout later this year.
“As we work through the technical minting of the currency, we have to test it rigorously as a pilot that we’ll do in August. In September to December we’ll be recruiting more of the banks to come on board and then we’ll gradually expand the pilot out into a full-fledged launch of the CBDC.”
He also shed more light on the workings of the currency, suggesting financial institutions in the country would act as intermediaries between central bank and CBDC users.
The CBDC is also to be denominated as a complement to cash in the country, so that one coin is equal to one Jamaican dollar, designed to streamline the system of currency for ease of use.
The scheme will also be used to help serve unbanked sections of the population, with the central bank calling on telecoms companies and retail payments companies to back the scheme in order to bring unbanked residents on board.
If the timeline goes to play, the first CBDCs would be in general circulation within weeks.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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