The Central Bank of Jamaica has invited technology companies to test the digital currency
The Bank of Jamaica invited technology solution providers to develop and test the potential capabilities of a central bank in the field of digital currency, i.e. CBDC.
According to a statement published on July 17, interested companies were asked to submit details of their solutions by August 7, 2020.
The developed solutions will be tested within the framework of the recently established Fintech Regulatory Sandbox company. This will ensure that consumers and data privacy are adequately protected before solutions are introduced to the Jamaican economy.
The central bank has stated that the digital currency issued by the bank will be a fiat currency and should not be confused with cryptocurrencies.
The bank has drawn the line between CBDC and cryptocurrencies, saying that cryptos do not fulfill all the basic functions of money and are generally not backed by a central authority either.
While the bank has made it clear that it does not intend to develop cryptocurrency, there are no specifications as to whether or not it intends to use blockchain technology.
Once CBDC is launched, both individuals and businesses will be able to use CBDC as a means of payment and store of value, as they do with cash today.
However, as noted by the bank, CBDC could provide a more efficient and safer alternative to payments, which will enhance financial integration in Jamaica. It is also expected that deposit taking institutions will experience a streamlined cash management process that will be more profitable.