BOJ mints first batch of digital currency

The Bank of Jamaica (BOJ) yesterday minted Jamaica’s first batch of central bank digital currency (CBDC).

A total of J$230 million in CBDC will be issued to deposit-taking institutions and authorised payment service providers during the CBDC pilot exercise which ends in December.

Speaking at the ceremony, Finance Minister Dr Nigel Clarke acknowledged the rapid progress being made with BOJ’s CBDC project and noted its importance in the creation of a digital economy. He also promised that the legislative amendment to accompany CBDC will be in place before the end of this fiscal year.

BOJ Governor Richard Byles thanked Clarke for his support as he recognised the work of BOJ’s CBDC project team, noting that the next step after this significant milestone is to ensure widespread access and acceptance by taking CBDC to the people.

CBDC is a digital form of central bank-issued currency and therefore is legal tender. It is not to be confused with cryptocurrency, which is privately issued, generally not backed by a central authority and does not perform all the essential functions of money.

As legal tender, CBDC can be exchanged dollar for dollar with physical cash. Households and businesses will be able to use CBDC to make payments and store value, as now obtains with cash. CBDC is backed by the issuing central bank and issued to authorised financial intermediaries to include deposit-taking institutions on a wholesale basis just as now being done with physical currency.