The Bank of Jamaica (BOJ) has announced the launch of their first central bank digital currency (CBDC) which is being issued to deposit-taking institutions and authorized payment service providers.
As per the central bank’s announcement a total of J$230 million dollars ($1.5 million) has been issued to deposit-taking institutions and authorized payment service providers with the BoJ expecting to onboard further banks between September and December.
After the launch of the BoJ CBDC, the financial institution expects to help increase financial inclusion in Jamaica. While a large number of Jamaican’s are estimated to be unbanked, precise numbers have been hard to come by. One report by Global Findex Database outlined how some 77,000 applicants placed bank information that could not be validated.
Unbanked individuals generally pay for commodities with cash, but as part of their CBDC programme, the BoJ has hopes that their CBDC will promote greater financial inclusion, as well as helping the government in the implementation of its COVID-19 social program.
With the coronavirus pandemic continuing to impact the Jamaican economy, one of the ways the BoJ is hoping to boost their economy is through the creation of a digital economy that will increase financial inclusion as well as increasing efficiency and security in their financial system.
Last year the BoJ said it would continue to work with the Principles for Financial Market Infrastructures (PFMIs) to regulate financial companies, as part of their commitment to ensuring data privacy and money laundering
The initial pilot was announced in July when the BoJ stated that their CBDC would be ready in August. At the time Mario Griffiths, Director of the BOJ’s Payment System Policy Department stated that data privacy and money laundering risks were being taken into consideration:
“In terms of anti-money laundering, we have ensured that there is intermediation where the central bank will issue CBDC to the financial institutions as well as authorised payment service providers that are regulated by the Bank of Jamaica,”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.