Global Interest in Proposed Introduction of CBDC

The International Monetary Fund (IMF) is among several global institutions taking keen interest in the proposed introduction of a central bank digital currency (CBDC) in Jamaica.

Governor of the Bank of Jamaica (BOJ), Richard Byles, says other notable interests include the Bank of International Settlements, the United States Federal Reserve System, and the Central Bank of Lithuania.

The BOJ is spearheading the CBDC’s development and implementation.

Mr. Byles said presentations were recently made to officials of these institutions at their request, which, he added, underscored that “this is a really important programme”.

He was speaking during the Rotary Club of St. Andrew North’s virtual installation ceremony on Thursday (July 1), for incoming President, Kecia Taylor.

Mr. Byles said Jamaica is among the few countries, globally, launching a CBDC pilot, noting that the others include The Bahamas and the Eastern Caribbean bloc.

He added that China “is the only other country we know that has… gone beyond the pilot stage… and fully launched a CBDC”.

“So, in a way, the world is looking at us… with [our development of a] central bank digital currency [to determine whether] it will be a success and what are the lessons to be learnt from Jamaica,” Mr. Byles added.

He indicated that work is being finalised to commence the CBDC’s pilot implementation in August.

The Governor said technical support for the CBDC’s rollout, among other inputs, is being reviewed to facilitate onboarding of the first financial institution – National Commercial Bank (NCB) – to test the system.

Mr. Byles advised that between September and December, the BOJ will look to onboard more banks, adding that “we will gradually expand the pilot… into a full [rollout] in 2022”.
CBDC is a form of Central Bank-backed currency and is, therefore, legal tender. It can be exchanged, dollar for dollar, with actual cash and is issued to licensed deposit-taking institutions (DTIs).

Individuals, households and businesses can use it to pay for goods and services, as obtains with cash.

According to the Bank, the benefits to be derived by citizens, businesses and the Government from the adoption and introduction of a viable digital currency solution include increased financial inclusion and another means of efficient and secured payments.

Additionally, the BOJ says a CBDC represents an opportunity for DTIs to improve cash management processes and costs.