Details on Jamaica's CBDC

Details on Jamaica's CBDC

  • mdo  Admin
  •   Articles
  •   August 27, 2021

Recently the Bank of Jamaica (BOJ) minted $230,000,000 worth of its new Central Bank Digital Currency (CBDC) as part of its Pilot project to test Digital Currency for Jamaica. The National Commercial Bank Jamaica (NCB) is the first to receive its allocation of the central bank digital currency in September 2021, with a second financial institution to be introduced in November. National roll-out is expected in early 2022. A primer on the CBDC was published here.

The technology used to in the CBDC is in partnership with eCurrency, of which the Founder and CEO has stated is safer and more secure than Bitcoin in three aspects: security of the currency, security of its users, and "sovereign" security. Since it does not use blockchain it offers higher security than cryptocurrencies.

According to Jamaica's Deputy Governor Natalie Haynes there has been a public contest for the taglines, logos, image designs, and unique name of Jamaica's new CBDC. The winners of the contest have been notified and details will be released to the public soon.

Meanwhile, BOJ has produced and published two episodes in a series educating the public about aspects of the up-and-coming CBDC. Watch the first and second episodes here.

Here are some key points from the videos:

1. Central Bank Digital Currency (CBDC) is simply money in a digital form. Rather than having physical notes and coins in your pocket, the money will be stored electronically in a CBDC Wallet and used via your phone for example. All Institutions that provide CBDC Wallets are called Wallet Providers.

2. As legal tender, Jamaicans will accept CBDC with the same confidence as notes and coins as it is backed by BOJ. At any point in time a person can move CBDC from their Wallet to physical notes and coins and vice versa. They can do this at an ATM or any Wallet Provider Location. In other words, you can swap (switch) from one to the other.

3. All Jamaicans will have access to CBDC, all you need to do is register at your bank or payment service provider. CBDC will bring a number of benefits to include safety, convenience and cost.

4. You can get a CBDC Wallet automatically if you already have a bank account, and if you don't, all you need when setting up your CBDC Wallet is basic information such as your name, address, tax registration number (TRN) and a government issued photo ID (Driver's Licence, Passport, or Voter ID). Bank of Jamaica will NOT have access to your personal data. Customers' personal information is collected by the Wallet Provider and will not be sent to BOJ or the Government. The Bank will only receive general data for economic analysis and not data on customers or their transactions.

5. You can use CBDC at any vendor that has a CBDC Wallet such as the corner shop, the sky juice man, the pan-chicken man, supermarket, pharmacy and even pay your bills. BOJ will launch the pilot in August 2021 and that will continue until year end. Then in Quarter 1 of 2022, it will be National Roll Out. If you want to be a part of the Pilot, please go ahead and speak to your preferred Wallet Provider.

A CBDC does not replace cash. Learn more about CBDCs from DIGICEN's CBDC article.

Why is financial inclusion through CBDCs important?

Economic Inclusion is the idea that everyone can participate in the economy making for a robust economy. Before someone has the opportunity to purchase a smartphone or internet-enabled device and other basic necessities they require the income necessary to do so. Income can be obtained through jobs, gigs, and/or via cash-transfer programs such as a Basic Income policy, a tax credit policy (like the CTC), and with the help of tools such as a CBDC.

Why should a CBDC not be a typical cryptocurrency?

DIGICEN advocates against the use of cryptocurrencies for a variety of reasons, you can read the list of reasons here, and instead advocates for Central Bank Digital Currencies.

Why advocate for a CBDC in your country?

Everyone should have the opportunity to participate in the economy, and they should be able to benefit from any existing and future government programs that can be delivered through the CBDC. DIGICEN works to encourage the Innovation Cycle of Digital Economic Inclusion. In order for the cycle to continue, DIGICEN advocates to make sure that everyone has the necessary tools: a foundational income floor such as a Universal Basic Income (UBI); access to internet-enabled devices and apps (Universal Access); freedom to use CBDCs; and access to democracy technology.

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