Jamaica is to pilot a central bank digital currency (CBDC) over the course of this year and begin rolling it out in 2022, the country’s minister of finance Nigel Clarke has revealed during a budget speech.
The Bank of Jamaica’s CBDC will be exchangeable with the physical Jamaican dollar on a one-to-one basis and is being introduced as part of the government’s plans for the digital transformation of the economy, the minister explained.
“The government is concerned about the size of the unbanked population. Access to financial services is essential to improving productivity and wellbeing,” Clarke said.
“There are individual benefits and there are also spillover benefits to the society as well.
“With recent innovations in technology, it is possible to introduce alternatives to cash that are cheaper, more secure, more efficient and that offer the prospect of increasing competition in the provision of financial services and of greatly increasing the financial inclusion in our society.
“It is the policy of the Government of Jamaica to introduce a central bank digital currency (CBDC), which has been conceptualised by the Bank of Jamaica, which is leading its implementation.”
“The Bank of Jamaica will issue CBDC to deposit-taking institutions (DTIs) and authorised payment service providers,” the minister added.
“Deposit taking institutions, authorised payment service providers and telecom providers will on-board unbanked customers. Agents will have the ability to onboard customers that request a digital transaction account using their mobile device.
“Customers can top up their account with CBDC through authorised agents or smart ABMs. Customers can do business using CBDC phone-to-phone with merchants.”
The launch in Jamaica follows the introduction by the Bahamas of its Sand Dollar central bank digital currency in October 2020.