Jamaica to launch CBDC pilot in August

The Bank of Jamaica announced that, from August, it will begin a pilot deployment of the national digital currency (CBDC) system with the country’s financial institutions, according to the Jamaica Observer.

The Governor of the central bank, Richard Byles, clarified that the regulator is currently examining the technical aspects of the CBDC in its own ‘sandbox’, which has all the necessary infrastructure.

The pilot’s first participant will be Jamaica’s largest financial group — National Commercial Bank (NCB).

“From September to December, we will bring in more banks to participate in the tests, and then we will gradually expand the pilot project to a full CBDC rollout,” Byles explained.

According to him, the digital currency will differ from private cryptocurrencies and will be sold only to licensed commercial banks, depository institutions, and payment systems authorised by the Bank of Jamaica.

Financial institutions will act as intermediaries through which individuals and businesses will access the CBDC. Banks will hold the assets in corresponding digital-wallet accounts, with clients accessing them via mobile phones.

As legal tender, the digital currency will complement the use of banknotes and coins issued by the central bank, the governor said.

“It is an instant and highly efficient method of payment compared with cash. It will reduce the costs of producing, transporting and securing cash, which run into billions of dollars a year. Merchants will not need to provide change, as payments can be made to the cent,” said the head of the Bank of Jamaica.

He also noted that the regulator plans to provide simplified access to CBDC accounts without the mandatory KYC requirements. This should help attract a broader user base, especially from the unbanked population.

Earlier, Jamaica’s Finance Minister Nigel Clarke said that a full launch of the CBDC will occur in 2022.

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