Governor of the Bank of Jamaica (BOJ) Richard Byles has provided an updated timetable for the roll-out of the central bank digital currency (CBDC).
The BOJ governor said the central bank will begin testing the CDBC issuance and redemption process next month, and thereafter facilitate all types of transactions and conduct end-to-end testing of the solution between September and December this year.
“The CDBC is far more efficient to use than cash. It is instantaneous, mobile phone to mobile phone. Also, it will reduce the cost of producing, transporting and securing cash, which runs into billions of dollars each year. Also, there will be no need for merchants to find change, as payment can be to a cent. In the case where a phone is stolen, the CDBC cannot be accessed without a code,” Byles explained.
He further noted that an unbanked Jamaican only needs to take a selfie or a photograph of a government-issued identification and send it to the financial institution to become a CBDC user, subject to the institution’s “know your customer” guidelines.
Byles was speaking at the virtual installation ceremony of Kecia Taylor, 2021-2022 president of the Rotary Club of St Andrew North, on Thursday, July 1. She is the fifth female president of the 34-year-old Rotary Club of St. Andrew North.
CBDCs will complement banknotes and coins issued by the BOJ as a legal tender, useable only in Jamaica; however, the BOJ will continue to issue physical currency
The central bank governor reiterated that the CBDC was not a cryptocurrency, which is not usually issued by a central bank. Unlike cryptocurrency, BOJ will mint and “sell” CBDC to commercial banks and other deposit-taking institutions (DTIs) and licensed and authorised payment service providers.
In turn, the financial institutions will “sell” CBDC to businesses and individuals at a rate of J$1 in cash to 1 CBDC. However, the financial institutions will hold the CBDC in digital wallet accounts at their respective banks for their customers to access to make purchases or received payments from mobile phone to mobile phone.
Digital wallets are financial accounts that allow users to store funds, make transactions, and track payment histories by computer. These pieces of software may be included in a bank’s mobile app, or as a payments platform like PayPal or Alipay.
According to the Governor, the digital currency will also be adaptable to traditional technology and will be easily integrated with a bank’s RTGS.
Byles said the introduction of the CBDC has gained the interest of at least five international organisations: International Monetary Fund, Bank of International Settlements, Federal Reserve, Central Bank of Lithuania, and Thomas DeLaRue, which are watching the roll-out process.