Bank of Jamaica mints first tranche of its CBDC as part of tests
The Bank Of Jamaica, in a ceremony, has minted the first instalment of its central bank digital currency (CBDC) JMD on August 10 as it looks set to adopt digital currencies in the coming months.
The full tranche is expected to be of size 230 million JMD and is part of the bank’s efforts to digitize the Jamaican economy as soon as possible. This is part of a pilot project that is expected to end by this year and these will be issued to payment service providers and other financial firms to check the robustness and the stability of the system once the CBDCs are introduced.
This project is fully supported by the government as the Minister of Finance, Nigel Clarke, vowed to bring in laws for the regulation and control of digital currencies by the end of the fiscal year. All the laws around the world are designed for fiat currencies only and so more than the introduction of the CBDCs, the real challenge would be to bring in laws for their regulation and ensuring that the digital currencies do not affect the existing monetary system.
One of the main advantages seen in CBDCs by the Bank of Jamaica is that it would be able to reach out to the far corners of the country with the digital currencies and would also be able to bring the unbanked aboard the banking system. This would be a win-win situation for all as the government and the BOJ would be able to deliver benefits to the new users and the users would also be able to make use of all the opportunities that this could provide in the long run.
Not only Jamaica, but many other central banks all around the world look at digital currencies as a means to solve this problem and bank the unbanked over a period of time. The digital currencies may not necessarily be in the form of cryptocurrencies but can be in any form that can be stored and transacted via digital wallets. It is estimated that over 60 central banks around the world are in various phases of testing and piloting the CBDCs with Venezuela announcing the launch from October while China is also expected to be the first country, among the larger ones, to introduce CBDCs in the coming months.