Jamaican Central Bank Mints And Releases First Batch Of CBDCs
Jamaica’s Central Bank has minted the first batch of the country’s central bank digital currency (CBDC). The minted J$230 million of CBDC will be issued to deposit-taking institutions and authorized payment service providers during the CBDC pilot exercise which ends in December. The digital currency is now available for use in the country as legal tender for the first time.
Following the completion of the pilot, the CBDC will be generally available through financial and non-financial intermediaries appointed by the Bank of Jamaica (BOJ). The technology for the CBDC is provided by Irish fintech eCurrency Mint.
The full roll-out of the CBDC is expected to begin next year. During the BOJ’s minting ceremony, Jamaica’s Minister of Finance and the Public Service Dr. Nigel Clarke promised that the legislative amendment to accompany CBDC will be in place before the end of this fiscal year.
The CBDC is a digital form of Jamaican dollar currency which is fully backed by the BOJ. CBDC is not a cryptocurrency. It can be exchanged for physical Jamaican currency now with the institutions participating in the BOJ’s CBDC pilot. It is convertible on a one-for-one basis with Jamaican currency.
CBDC is backed by the issuing central bank and issued to authorized financial institutions to include deposit taking institutions on a wholesale basis just as now being done with physical currency. It will provide another, easier-to-access means of efficient and secured payments.
The launch of CBDC’s will enable increased financial inclusion of thousands of unbanked and underbanked people as they will be brought into the financial system by enabling conduct of business directly from their mobile phones.
The BOJ said it will now work towards ensuring widespread access and acceptance by taking CBDC to the people. There was also a public contest conducted to propose a name, tagline, logo and image design for Jamaica’s CBDC. The process is completed and the winners will be notified and announced soon.
Digital currencies, more so CBDCs, are expected to become the preferred legal tender in the next few years. All a user need is a wallet address to send the transaction, instead of asking the bank for a cash transfer or issue of a check.
Businesses will be able to make CBDC payments and store value at no cost. These transactions are also to be settled in real time allowing for more convenience and eliminating the need to process and store large volumes of physical cash.
CBDC will help to include more people in the economy and will also provide an opportunity for deposit-taking institutions and the BOJ to improve their cash management processes.
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