Jamaica is rolling out its central bank digital currency after ‘successful pilot’

A mural of Bob Marley and his sons adorns the Trench Town neighborhood of Kingston, Jamaica (AFP via Getty Images)
A mural of Bob Marley and his sons adorns the Trench Town neighborhood of Kingston, Jamaica (AFP via Getty Images)

Jamaica will roll out its own digital currency in the first quarter of 2022 after a “successful” pilot, the country’s central bank said on Friday.

The pilot for the country’s prototype central bank digital currency (CBDC) began on May 2021 and ended on 31 December 2021.

The Bank of Jamaica (BOJ) tested a range of services in the pilot, including minting CBDCs, issuing them to wallet providers and distributing them to retail customers.

The BOJ teamed up with digital currency vendor eCurrency Mint and the country’s National Commercial Bank (NCB) to test the services.

The central bank minted 230m Jamaican dollars ($1.5m or £1.1m) of digital currency to be issued to deposit-taking institutions and authorised payment service providers during its inaugural minting ceremony on 9 August 2021.

It issued CBDCs worth a million Jamaican dollars to its banking department to be distributed to staff a day later.

Two months later in October, it issued 5m Jamaican dollars ($32,100 or £23,840) of CBDC to NCB, marking this the first CBDC issuance given to a deposit-taking institution.

NCB, the first wallet provider in the pilot, successfully onboarded 57 customers including four small merchants and 53 consumers, the central bank noted in a statement.

These customers conducted person-to person, cash-in and cash-out transactions through 37 accounts over the course of the pilot and completed transactions with small merchants like local craft jewellers, footwear designers and fashion and garment boutiques through an NCB-sponsored event.

The national rollout for the CBDC is scheduled for the first quarter of 2022 and the NCB will continue onboarding existing customers and new customers, the Jamaican government noted.

“Two additional wallet providers, who are now conducting virtual simulation testing, will be able to order CBDC from BOJ and distribute to their customers, and the testing of transactions between customers of various participating wallet providers will be undertaken,” the BOJ said.

CBDCs are digital currencies issued as legal tender by a country’s main bank, such as Sweden’s e-krona and China’s digital yuan.

So far about 90 countries are exploring their own digital currencies, and 14, including major economies like China and South Korea, are in the pilot stage, according to a tracker by the Atlantic Council.

Despite their similar status to cryptocurrencies as digital assets, experts have pointed that CBDCs are more centralised as opposed to virtual currencies like bitcoin whose basic feature is to be a decentralised asset for monetary transactions.