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BOJ Closer To Rollout Of Digital Currency

By: , November 22, 2021
BOJ Closer To Rollout Of Digital Currency
Photo: contributed
BOJ official logo
BOJ Closer To Rollout Of Digital Currency
Photo: Contributed
The Bank of Jamaica Building, Nethersole Place, downtown Kingston. (JIS File Photo)

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The Bank of Jamaica (BOJ) is slated to commence national rollout of the Central Bank Digital Currency (CBDC) platform during the first quarter of 2022.

Deputy Governor with responsibility for Banking, Currency Operations, and Financial Markets, Natalie Haynes, says it is anticipated that by then, additional deposit-taking institutions (DTIs) will be onboarded to enable the issuing of wallets to facilitate an expansion of the number of individuals and businesses utilising the currency.

National Commercial Bank (NCB) is currently the sole DTI participating in the CBDC pilot, which commenced in June and is slated to conclude in December.

Speaking during the BOJ Monetary Policy Committee (MPC) digital quarterly media briefing on Friday (November 19), Ms. Haynes said NCB has developed its wallet and has begun testing the facility.

She indicated that the bank is doing so with staff and their family members, adding that “we’re going to roll that out, before year end, to other account holders, namely individuals and small merchants”.

The Deputy Governor said these merchants include vendors, hairdressers and barbers, adding that “they will be doing testing, in terms of person to person and person to business [transactions]; in addition, they are going to be testing cash-ins and cash-outs at the [automated banking machines] ABMs”.

Ms. Haynes told journalists that the BOJ has also developed a wallet for its staff, adding that its interoperability with NCB’s will be tested, come December.

“An important component of any CBDC [is] for there to be interoperability between all wallet providers,” she further indicated.

CBDC is a digital form of central bank-issued currency and, therefore, is legal tender that can be exchanged dollar for dollar with physical cash.

Households and businesses will be able to use CBDC to, among other things, make payments as now obtains with cash.

CBDC is backed by the issuing central bank and is issued to authorised financial institutions, including deposit-taking institutions, on a wholesale basis as is 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.

For deposit-taking institutions and the BOJ, CBDC presents an opportunity to improve cash management processes and costs.

Last Updated: November 23, 2021

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