September 3, 2021
In August Jamaica joined the Eastern Caribbean group of countries and The Bahamas in launching its digital currency.
The first batch of the Central Bank Digital Currency (CBDC), was launched by The Bank of Jamaica. A total of J$230 million (One Jamaica dollar=US$0.008 cents) was issued to deposit-taking institutions and authorized payment service providers during the CBDC pilot exercise which ends in December.
CBDC is a digital form of central bank-issued currency and therefore is legal tender. It is not to be confused with cryptocurrency, which is privately issued, generally not backed by a central authority and does not perform all the essential functions of money.
As legal tender, CBDC can be exchanged dollar for dollar with physical cash. Households and businesses will be able to use CBDC to make payments and store value, as now obtains with cash. CBDC is backed by the issuing central bank and issued to authorised financial institutions to include deposit taking institutions on a wholesale basis just as now being done with physical currency.
The anticipated benefits of CBDC for Jamaican citizens, businesses and the government include increased financial inclusion, as it will provide another, easier-to-access means of efficient and secured payments
Jamaica’s Finance and Public Service Minister, Dr. Nigel Clarke promised that the legislative amendment to accompany CBDC will be in place before the end of this fiscal year.
BOJ Governor, Richard Byles said that the next step is to ensure widespread access and acceptance by taking CBDC to the people.
The chief executive officer of eCurrency, Jonathan Dharmapalan, said Jamaica has the fastest-moving CBDC project in the world.
Bahamas last year, launched its Sand Dollar while the Eastern Caribbean Bank launched its digital currency in April.