Jamaica hopes its new central bank digital currency (CBDC), due to be unveiled in the first quarter of the year, will help the country’s unbanked population.
That’s according to Natalie Haynes, a deputy governor with Bank of Jamaica (BOJ) for banking and currency operations and financial markets infrastructure, speaking in an interview with Reuters Monday (Jan. 31).
“The majority of Jamaicans are financially excluded,” Haynes said. “To get those persons into the formal financial system, we decided that the central bank digital currency would be a good opportunity.”
The BOJ concluded an eight-month pilot of its central bank digital currency at the end of last year. The bank minted 230 million Jamaican dollars (or $1.5 million) in digital currency to be issued to deposit-taking institutions and authorized payment service providers in early August, then issued 1 million JMD ($6,500) in CBDC to staffers.
In October, the bank issued 5 million JMD ($32,000) worth of CBDC to the National Commercial Bank (NCB), one of the island’s largest financial institutions.
Haynes told Reuters the BOJ aims to replace 5% of Jamaican dollars with digital currency each year. The bank says NCB has signed up 57 customers to use the CBDC.
“It’s a different way to pay and allows for easy peer-to-peer transactions,” said John-Matthew Sinclair, chief product officer for TFOB (2021), a subsidiary of National Commercial Bank.
The launch of Jamaica’s digital currency comes in the wake of a joint effort by a number of Eastern Caribbean nations to launch a digital currency called DCash. Rolled out last year, this digital coin is now used on the islands of Antigua and Barbuda, Grenada, Saint Kitts and Nevis, Saint Lucia and Saint Vincent.
The Bahamas was the first nation in the region to issue a digital currency. Known as the Sand Dollar, this CBDC has been in circulation since 2020.