Cryptocurrency

Jamaica enters the race for the digital currencies from central bank

The central bank of Jamaica has confirmed its intention to develop and implement a project of digital currencies freely convertible with the jamaican dollar. The financial institution opened a public call for providers from the industry to present their initiatives and be tested in the sandbox regulatory.

The country reminded in a press release that at the beginning of the 2020 made public his willingness to use the calls digital currencies of central banks (CBDC) as a potential mechanism for greater financial inclusion. Now this vision is underway with the reception of ideas for potential application.

The bank made it clear that his intention is not to create a new criptomoneda as bitcoin, for example, because they are not backed by a central authority and “does not perform all the functions of money”. The CBDC will be a currency fiat of legal tender that would be used both by local businesses as well as for its citizens, is reported.

Households and businesses will be able to use the CBDC to make payments and store value, as now you get with the cash. The CBDC has the backing of the central bank issuer and is issued to authorised institutions deposits wholesale (banks) to the same as it is now with the physical currency.

He mentioned the bank in its newsletter.

In relation to the tests that will be done in the sandbox regulatory, it is noted that this space will serve to determine the feasibility of the project in a controlled environment. Among the elements that seek to guarantee are the privacy and the protection of the consumer.

It is not clear for how long will last the tests or when to close the call. Nor is it specified on what kind of platform would be the development or if it involves technology of Bitcoin as the digital system.

What ensures the bank is looking to chart a path for Jamaica transiting towards a digital economy in which consumers can make payments using “any device convenient.”

The ratification of Jamaica as a country interested in the CBDC comes after other States such as China have already taken important steps for the adoption of digital currencies. In April of 2020 Breaking News reported that a chinese state bank was testing a mobile application for what would be its digital currency.

More recently, the Bank of Spain published a research on the CBDC in which it was concluded that Bitcoin leverages the advances of the digital currencies of the central banks. This is a report that is weighted and is given a space of our own to the first criptomoneda and its influence on the current financial system.

The CBDC could be interpreted as a form of money programmable which would allow the banks a greater scope in their monetary policy, always with a tone of centralization. In the case of Jamaica, saying that it would serve businesses and consumers, we would be talking of a universal mechanism that would not be limited to the private banks, but open to the public as a new form of cash.

About the author

Belinda Carey

Belinda Carey

A finance girl by education, Belinda has been drawn to cryptocurrencies ever since Bitcoin first emerged in the 2009. Nearly a decade later, Belinda is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies.

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