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The Bank of Jamaica intends to distribute $1.5 million in CBDC to institutions and approved payment service providers as part of a trial programme that will finish in December.
The Bank of Jamaica, or BOJ, has minted the country’s first batch of CBDC, signalling the country’s rapid development with the country’s central bank digital currency (CBDC).
The BOJ officially announced that its dedicated CBDC division demonstrated the process of minting digital currency at a financial ceremony on Monday.
The issuing process for a digital version of the Jamaican dollar (JMD) was carried out with participation from Jamaica’s finance minister Nigel Clarke, BOJ governor Richard Byles and a group of senior BOJ executives, as well as a management team from Irish technology firm eCurrency Mint.
According to the release, the BOJ intends to issue 230 million JMD ($1.47 million) in the form of a CBDC to deposit-taking institutions and authorised payment service providers as part of a digital currency pilot programme that will finish in December.
Minister Clarke stated that the Jamaican government has made quick progress in the establishment of the country’s digital currency project, emphasising its critical role in the island country’s building of a digital economy. According to the official, local MPs are working on a legislative reform that will give a legal foundation for the Jamaican CBDC by the end of 2021.
According to BOJ governor Byles, the next phase in Jamaica’s CBDC adoption would be to secure universal availability and acceptability by introducing CBDC to users.
According to the release, the Jamaican CBDC intends to provide a variety of benefits to users, including “easier-to-access means of efficient and safe payments.” “CBDC gives an opportunity for deposit-taking institutions and the BOJ itself to optimise cash management processes and costs,” the central bank noted.
The BOJ did not respond immediately to Cointelegraph’s request for comment.
The current step is consistent with the BOJ’s CBDC intentions, since governor Byles said that the Jamaican CBDC’s initial roll-out was anticipated for August. The CBDC, which is controlled and issued by the BOJ, is intended to supplement Jamaica’s banknotes by allowing financial institutions to issue the currency to individual and business account holders, with each digital token tied to the JMD on a 1:1 basis.
The announcement comes as a growing number of countries aggressively test national CBDC projects, with Venezuela aiming to start a CBDC in October. According to a Friday analysis by JPMorgan strategist Josh Younger, retail CBDCs could risk “disintermediating commercial banks” and lead to a 20% or 30% loss of their funding base.