Bank of Jamaica Successfully Concludes it’s first CBDC Trial Run
Bank of Jamaica (BOJ) has announced the completion of its central bank digital currency (CBDC) trial. The country is ready to roll out the CBDC soon. Earlier last year, the Jamaican central bank announced testing a prototype CBDC in its financial regulatory sandbox.
Other central banks globally are still preparing for a CBDC pilot. The Bank of Jamaica is on track to achieve its CBDC rollout target at the beginning of this new year. The bank worked with eCurrency Mint, a technology solutions provider, on the sandbox project. They have given an outline of the progress of the CBDC pilot.
The scope of the pilot was just for wallet providers who have shown they can work within the timeframe. According to the announcement, The National Commercial Bank (NCB) tested the range of services that can use the CBDC solution.
NCB was the only payment service or wallet provider willing to take up the task of trying the digital payment system.
NCB performed the tests using its Lynk payment platform. TFOB Limited, The Future of Business. TFOB is the bank’s newest vehicle that provides the rollout of various non-traditional and effective financial services utilizing modern instruments.
The positive outcome of the pilot project relied on whether a CBDC and the attendant technology solution could be successfully implemented in Jamaica. Various activities were targeted and achieved during the pilot.
The Bank of Jamaica
Mid last year, BOJ minted over $220 million worth of digital currency. These were to be issued to deposit-taking firms. During the same period, the bank issued nearly $1 million worth of CBDC to its banking department.
The first CBDC issuance to a deposit institution was worth $5 million, made to NCB. The NCB involved around 60 customers who conducted transactions through almost 40 accounts.
According to BOJ, transactions with small merchants such as fashion and clothes boutiques, local craft jewelers, and shoe designers are included.
The rollout will allow two more wallet providers to onboarding existing and new customers. The providers are presently conducting testing to distribute CBDCs. Moreover, they are also testing transactions between customers of various participating wallet providers.
Though crypto- specific legislations are absent in Jamaica, the assets act by Jamaica’s present banking and securities regulations.
Central banks globally are at the peak of developing CBDCs in the respective jurisdictions. CBDCs have acquired full support from relevant authorities. Still, governments worldwide try to bring forth strict regulations around private cryptocurrencies.
The issuance of CBDCs is stalling due to the nature of digital currencies and Distributed Ledger Technology (DLT). Late last year, G7 finance leaders outlined CBDC guidelines.