Bank of Jamaica plans to pilot a Central Bank Digital Currency

On Tuesday, the Bank of Jamaica (BoJ) announced that it would be working with Ecurrency Mint Incorporated to pilot a Central Bank Digital Currency (CBDC) project in May.

Jamaica is an island country situated in the Caribbean Sea and has since been working with an “extensive procurement process” to ensure that the CBDC project is successful. The country’s central bank, known as the Bank of Jamaica, has chosen a technology provider to help with the CBDC solution.

The Bank of Jamaica explains:

“Ecurrency Mint will be the provider when the national CBDC roll-out begins in early 2022. The CBDC pilot will be tested thoroughly in May and until the end of December 2021. According to the central bank’s notice, the CBDC will work alongside paper notes and Jamaican coinage.

Ecurrency Mint Incorporated is a global pioneer of the hardware, software, and cryptographic security protocol technology to enable central banks to securely issue, distribute and supervise a digital fiat currency (CBDC) that will operate alongside notes and coins as digital legal tender.”

Jamaica has been working on a CBDC project since early 2020. In May 2020, the Bank of Jamaica announced on Twitter that it is researching CBDCs internally as it introduced its new fintech regulatory sandbox. And in the following month, the bank formally invited interested CBDC providers to “develop and test potential CBDC solutions” in its sandbox. The startup—Ecurrency Mint Incorporated—also stems from the BoJ’s Fintech Regulatory Sandbox.

The Bank of Jamaica is working to stabilize the country’s economy

The government of Jamaica views the accelerated transition to a digital society and economy as vital for economic recovery following the COVID-19 pandemic. The Minister of Finance and the Public Service, Niguel Clarke, added that a CBDC could improve financial inclusion by making financial services available to the nation’s unbanked population.

“It is, therefore, the policy of this government, Madame Speaker, to introduce a central bank digital currency,” Clarke said, addressing the Speaker of the House.

Clarke further asserts that the government-issued CBDC will enable households and businesses to make payments and store value at no cost. And customers can do business with other people directly using their mobile phones, bringing “tens of thousands of Jamaicans” into the formal financial system.

He also clarified that a CBDC issued and backed by the Central Bank of Jamaica (BoJ) is not a cryptocurrency.

“It is, however, not to be confused with cryptocurrency, which is privately issued and not backed by a regulatory authority.
The CBDC will be legal tender and interchangeable with the Jamaican dollar in cash on a one-to-one basis,” Clarke said.

In all, the Bank of Jamaica has added the country to the growing list of countries building CBDCs. Some other countries—such as the U.S., Singapore, U.K., South Korea, Japan, and Canada—have already started discussions about developing a CBDC.