The African country of Uganda is currently drawing lessons from Jamaica on the implementation of a central bank digital currency (CBDC).
Jamaica, which is about to roll out its CBDC, named JAM-DEX, is being viewed as a model case by Uganda, which recently announced plans to introduce its own CDBC.
The implementation timelines are yet to be confirmed while the actual cost of issuing a government-owned digital currency remains unclear. Also unclear are the costs surrounding this venture such as the development of software tools, improved electricity generation for running high energy-consuming blockchain technology platforms, and recruitment of specialist personnel.
George Wilson Sonko, a performance measurement analyst at the Bank of Uganda, explains that the bank is “studying the idea of a central bank digital currency with the aid of case studies developed by peer central banks in Jamaica, Nigeria, Ghana and Kenya among others”.
The law does not accommodate digital currency use in Uganda but the authorities are exploring legal options for future amendments in financial laws that will facilitate the circulation of digital currency denominations. He stated that the dominant youth segment of the population is a plus for the introduction of a digital currency because it fits into their tech-savvy behavioural patterns.
The roll-out of a digital currency in Uganda will be anchored on the execution of high-value financial transactions that may be processed at a cheaper cost on a blockchain platform compared with the Real Time Gross Settlement System and mobile money platforms.
In the meantime, the Bank of Jamaica has given its commitment to working with Uganda on its CBDC programme, noting that it has done similar collaborations with other countries such as Ghana.
BOJ deputy governor with responsibility for banking, currency operations, and financial markets Natalie Haynes OBSERVER ONLINE that the central bank is excited at the prospect of working with Uganda on its CBDC programme, saying, "We will work with Uganda once they reach out to us.”