The Bank of Jamaica (BOJ) has minted the country’s first batch of its central bank digital currency (CBDC) on Aug 10.
According to the official announcement, a total of J$230 million dollars (JMD) in digital currency will be issued to deposit-taking institutions and authorized payment service providers as part of a pilot that ends in December. At current exchange rates, the amount equates to $1.49 million.
At the ceremony on August 10, Jamaica’s Minister of Finance, Nigel Clarke, said the BOJ’s CBDC project is moving along quickly and is a key part of the creation of a digital economy in the island nation. In March, Clarke said that the CBDC is not a cryptocurrency and Jamaican businesses will be able to make payments with it and store value at no cost.
“It is not to be confused with cryptocurrency, which is privately issued and not backed by a regulatory authority,”
According to the announcement, Clarke also promised that the legislative amendment to accompany the CBDC will be in place before the end of this fiscal year.
Banking the unbanked
The BOJ, which has been working on developing a CBDC since early 2020, had originally planned to begin the pilot program in May but delayed it for reasons unspecified.
The central bank has developed the project in partnership with Ireland-based fintech firm eCurrency Mint. eCurrency CEO, Jonathan Dharmapalan, had high praise for the venture and noted that Jamaica has the fastest-moving CBDC project in the world, in terms of how much work has been completed.
According to Deputy Governor Natalie Haynes, the judging process for the recent public contest to propose a name, logo design, tagline, and image design for Jamaica’s CBDC is complete, and the winners will be notified and announced soon.
Thousands of unbanked citizens will benefit from the CBDC and will be brought into the financial system as they can conduct business and transactions directly from their mobile phones.
The BOJ stated that households and businesses will be able to use the CBDC to make payments and store value, as they currently do with cash.
Uncle Sam backpedalling
Many U.S. bank bosses and senators, meanwhile, do not see this as any advantage whatsoever as plans for a digital dollar are stalling.
On Aug 6, BeInCrypto reported that Federal Reserve governor Christopher Waller remained “highly skeptical” that the country needs to develop its own CBDC. According to the banker, “facilitating speedier payments is not a compelling reason to create a CBDC,” and only a “fraction of the unbanked” would be interested in it.
A number of other more forward-looking bankers and lawmakers disagree, so what remains is more talk and no action.