The Bank of Jamaica (BOJ) is set to roll out its central bank digital currency (CBDC) pilot next month.
The Bank is looking to begin piloting the CBDC in August. The pilot will be rolled out across financial institutions. The first step will be commencing the pilot with the National Commercial Bank (NCB). Through which customers will be introduced to the new currency.
BOJ Governor Richard Byles commented on the CBDC pilot, saying, “We’re currently looking at all the technical sides of the system, and we have a sandbox in the bank that we have the whole infrastructure in. As we work through the technical minting of the currency, we have to test it rigorously as a pilot and 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.”
The BOJ will look to sell the CBDC to licensed commercial banks, deposit-making institutions (DTIs) and payment service providers authorized by the BOJ. The bank will be looking to distribute the CBDC into the financial market infrastructure, or Real Time Gross Settlement System (RTGS). Like most CBDCs, the digital currency will be pegged as $1 in cash to 1 CBDC.
CBDCs more efficient than cash
Byles commented on the move to adopt CBDCs as being far more efficient than physical cash, “It’s instantaneous and it is a very efficient way of paying, in a way that cash cannot. It will reduce the cost of producing, transporting and securing cash which run into billions of dollars each year. There will also be no need for merchants to find change, as payment can be to a cent,”
Similar to other countries, the CBDC will look to operate as legal tender within Jamaica once it successfully launches.
Countries flock to CBDC adoption
Jamaica becomes one of at least a dozen countries that are now working on CBDCs. Currently, China is the most advanced in terms of launching a CBDC. Other countries that have also recently begun taking steps to work on CBDCs include Vietnam, Singapore, Ukraine, and Japan among others.