The Bank of Jamaica invited technology solution providers to develop and test potential Central Bank Digital Currency, or CBDC solutions. According to a July 17 statement, bidders have been invited to submit the details of their solutions to the bank by Aug 7, 2020.
The developed solutions will be tested within the Fintech Regulatory Sandbox recently established by the bank. According to the island nation’s top bank, the sandbox is designed to ensure that consumers have adequate user protections and data remains protected before the solution is out. The Jamaican top bank was quick to clarify that the new currency would just be a digital version of the fiat and not a cryptocurrency.
The bank went on to spell out the difference between a cryptocurrency and a digital currency. The bank said that cryptos did not perform all the functions of money like a digitized fiat would, and was not regulated by a central authority. While the bank has made it clear that they will be sticking with fiat and not delving into crypto, it did not indicate whether it intended to use Blockchain technology.
Once the digital currency is ready for launch and use, both individuals and businesses will be able to use it as a means of payment as well as a store of value. The bank however noted that the CBDC may act as a more efficient, and inclusive means of payment for Jamaicans than hard cash. Deposit taking institutions are soon expected to take up the currency, and have their money management processes instantly improved.
The bank of Jamaica sees the introduction of the CBDC as a huge step forward towards building a more efficient digital retail payment system. According to the bank, Jamaicans stand to gain greatly because the CBDC offers a better way to process payments.
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