By Nathan Ferguson
The central bank of Jamaica is planning to release the pilot test for its CBDC (central bank digital currency) in the next month. The pilot test will be conducted through the financial institutions of the country. The test will commence from NCB (the national commercial bank), introducing the consumers to the country’s latest currency.
Richard Byles, the Governor of BOJ (Bank of Jamaica), reflected on the pilot project of the CBDC by stating that the technical dimensions of the system are being examined by them. He mentioned that the whole infrastructure of the latest currency is contained in a sandbox. He added that a rigorous pilot test, which would be conducted in August, is crucial for accommodating all the significant points of the currency. The further recruitment of the banks will start between September and December in a gradual expansion of the test until the broad-level release of the digital currency, according to the Governor.
The central bank digital currency will be sold by BOJ to authorized service providers for payments, DTIs (deposit-making institutes), and commercial banks. The digital currency will be distributed to the RTGS (real-time gross settlement) or the financial market. As is the case with most of the CBDCs, one unit of the currency will be exchanged for $1.
CBDCs: more effective than the traditional currency
It has been revealed by Byles that the step of adopting the digital currency will prove fruitful as the digital currencies present an efficient way of transactions as compared to physical cash. The factors like the expenditure on production, transportation, and security are eliminated by adopting a digital currency, which is cost-effective.
Alike the other countries, the authorities will devise a way to make the CBDC a legal tender to run within Jamaica following its successful launch.
Large-scale adoption of CBDC by the countries around the world
Jamaica is included among the countries which are currently going through the testing of their CBDC’s for releasing them. A large number of countries, other than Jamaica, are moving toward the adoption of digital currencies in the year 2021. The most equipped of the countries to look for their CBDC is China. Some other countries which have recently begun working on digital currencies include Japan, Ukraine, Singapore, and Vietnam, among others.