Bank of Jamaica (BOJ) Governor Richard Byles says plans are advanced to develop and implement the use of a central bank digital currency (CBDC) locally.

Speaking during the BOJ's digital quarterly briefing on Friday, February 19, Byles said that over the last couple months, the bank undertook the requisite preliminary work relating to assessments and protocols for approval of the proposed digital currency through the Government's process.

“So we are, hopefully, going to Cabinet for approval very shortly and will [thereafter] start a pilot in the second or third quarter of this year,” he informed.

Governor Byles advised that the pilot will “run for a couple months” and “hopefully, conclude by about the end of this year”.

Thereafter, he added, “we will be able to… publicly launch [the] digital currency in early 2022”.

CBDC is a form of central bank-backed currency and is, therefore, legal tender.

It is a fiat currency, which means it can be exchanged, dollar for dollar, with actual cash, and is issued to licensed deposit-taking institutions on a wholesale basis.

Individuals, households and businesses can use it to pay for goods and services, as obtains with cash.

The BOJ, in a statement, highlighted the benefits to be derived by citizens, businesses and the Government from the adoption and introduction of a viable digital currency solution.

These include increased financial inclusion, and providing another means of efficient and secured payments.

“For deposit-taking institutions, CBDC represents an opportunity to improve cash management processes and costs,” the BOJ further indicated.

The bank assured, however, that it will continue to issue notes and coins to facilitate all economic activity.

The BOJ maintained that it remains committed to the development of the retail payments infrastructure and Jamaica's transition to a digital economy “in which consumers have the ability to make and receive payments, any time, any place, using any convenient device”.