Bank of Jamaica completes CBDC pilot that will roll out soon
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TL;DR Breakdown
- Jamaica is ready to welcome its CBDC soon.
- The Bank of Jamaica has tested its CBDC through the National Commercial bank.
Bank of Jamaica (BOJ) has completed the Central Bank Digital Currency (CBDC) pilot. At the beginning of last year, BOJ said that it was testing a prototype central bank digital currency.
Central bank digital currency (CBDC) is expected to roll out at the beginning of this new year. The recent development signifies that the Bank of Jamaica is on track to achieve its CBDC rollout as other central banks globally are still preparing for one. The Bank of Jamaica has given a blueprint of the progress of its CBDC pilot.
National Commercial Bank on testing
The BOJ involved technology solutions provider eCurrency Mint Inc. in its Fintech Regulatory Sandbox. The pilot that took about 8months ended on 31 December 2021. The CBDC pilot involved wallet providers only. These providers had shown that they were willing to participate within the scheduled period.
Testing was open to financial entities already approved for the central bank’s so-called Sandbox for new, technology-driven financial solutions. National Commercial Bank (NCB) was the only payment provider ready to work with BOJ on testing.
They were faced with the challenge of testing the range of services offered using the CBDC solution because of their vast knowledge in the Sandbox. With the help of its Lynk payment platform, NCB tested the system.
The new subsidiary, TFOB Limited, The Future of Business, enabled this service. TFOB is piloting a range of non-traditional and modern financial services. TFOB targets to grow market share using modern technology.
Various activities were run and completed during the pilot. The pilot project’s success relied on whether a CBDC and the attendant technology solution could be successfully implemented in the country.
Minting and distribution
The services tested included minting over $220 million worth of digital currency issued to deposit-taking companies and authorized payment service providers. The CBDC group at the Bank of Jamaica showed the minting process and distribution of the digital Jamaican dollar in an event last year.
The central bank included its employees in the CBDC pilot, and $1 million worth of the currency was distributed to them in August. Later the bank issued $5 million to NCB in October. CBDC distributed to Retail Customers NCB the first wallet provider in the pilot. They managed to get about 60 customers. These customers conducted various transactions through accounts that exceeded 35. Moreover, they also completed transactions with small businesses through an NCB event.
NCB will bring in more customers. Two additional wallet providers will be able to order CBDC from BOJ and distribute it to their customers. For now, they are doing virtual simulation testing.
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