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Jamaica Looks to Compete with Bitcoin by Launching Its CBDC Soon

  • With this initiative, the government plans to restore momentum to the use of BTC and get 70% of the population to adopt the digital Jamaican dollar.
  • The central bank digital currency is expected to enter circulation in the first quarter of this year.
  • The Prime Minister of Jamaica will highlight the advantages of using the digital dollar, which will help increase financial inclusion.

The Jamaican government will launch its Central Bank Digital Currency (CBDC) this year in order to compete with Bitcoin, which has been gaining ground among the population. The announcement was made by the Prime Minister of the Caribbean nation, Andrew Holness, in a tweet.

It is expected that five years after the digital dollar comes into circulation, at least 70% of the island’s population will have adopted the new currency. The government thus plans to strengthen the use of Bitcoin and other private cryptocurrencies in the country.

Holness said in a lengthy Twitter thread that his government plans to make Jamaica a land of peace, prosperity, and opportunity through the imminent launch of the Digital Jamaican Dollar.

“The Bank of Jamaica will launch our own digital Jamaican dollar in 2022 after a successful pilot during 2021,” Holness wrote.

Although he did not reveal the exact date of the launch of the CBDC, it is believed that it could be in the coming weeks. The Bank of Jamaica (BOJ) had already announced on the last day of last year that it would introduce a new payment system to the country in the first quarter of 2022.

On the Flipside

  • It is evident that given the advance of cryptocurrencies on the Caribbean island, the government has decided to bring forward the launch of its digital currency.
The prime minister highlighted the advantages of using the digital dollar. "This will serve as the foundation for Jamaica's digital payment architecture and will facilitate greater financial inclusion, reduce transaction speeds and reduce the cost of banking for the Jamaican people."

For the design and execution of the CBDC pilot program, the Jamaican issuer worked with the National Commercial Bank (NCB) and tested the digital currency prototype presented by the provider eCurrency Mint Inc.

Why You Should Care

  • Jamaica thus joins the list of nations that are at various stages of testing the use of CBDCs, whose development is supported by the International Monetary Fund (IMF).
  • The Bahamas, its neighbor in the region, put the Sand Dollar into circulation in October 2020, becoming the first country to approve a central bank digital currency.

Governments in general are exploring the use of fiat digital currencies and blockchain technology to avoid competing with cryptocurrencies and prevent them from taking over the international financial system.

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