Banking News

Bank of Jamaica to pilot CBDC in August

jamaica currency

According to a Jamaica Observer report, the Bank of Jamaica (BOJ) announced that it will pilot a roll-out of its central bank digital currency (CBDC) in August with National Commercial Bank as the first to trial the solution and other banks to follow.

News of this launch comes after the central bank addressed concerns last week about the risks of a digital currency. In an interview with Jamaica Information Service, Mario Griffiths, Director of the BOJ’s Payment System Policy Department, said that data privacy and money laundering risks have been considered.

“In terms of anti-money laundering, we have ensured that there is intermediation where the central bank will issue CBDC to the financial institutions as well as authorised payment service providers that are regulated by the Bank of Jamaica,” said Griffiths. In other words, the third parties will be responsible for anti-money laundering compliance.

The Jamaican central bank plans to use a hybrid distribution model of issuing the digital currency to financial institutions, who will then distribute it to customers. The CBDC will be stored and exchanged by customers in a digital wallet account, which can be accessed via mobile phone.

In March, the BOJ made the decision not to use blockchain, primarily based on the ease of integration with the Bank’s real-time gross settlement system (RTGS), rather than the merits of the technology itself.

The BOJ expects to onboard further banks between September and December before scheduling a full launch of the CBDC. It hopes that the CBDC will promote greater financial inclusion and may aid the government in the implementation of its COVID-19 social programs.

Meanwhile, Hong Kong’s Monetary Authority said yesterday that it hopes to enter phase three of its cross-border CBDC trials later this year. The Banque de France also announced the completion of another wholesale CBDC experiment yesterday.