BANK OF JAMAICA’S CBDC SOLUTION
By Natalie Haynes
Bank of Jamaica (BOJ), during the period 16 July 2020 to 14 August 2020, issued an Expression of Interest (EOI) inviting technology providers to submit proposals to support testing a Central Bank Digital Currency (CBDC) solution in BOJ’s Fintech Regulatory Sandbox. The requirement, inter alia, was for the CBDC solution to enable the Bank to conduct all aspects of the currency management process, namely, minting, issuance, distribution, redemption and destruction (if necessary). At the close of the EOI, forty-three (43) responses were received. The evaluation of these responses was conducted in three phases.
- Phase 1 – Initial Proposal Submission: After the first phase of the evaluation six (6) vendors were shortlisted.
- Phase 2 – Product Demonstration: After the second phase of the evaluation four (4) vendors were shortlisted.
- Phase 3 – Product Simulation: At the close of this exercise, eCurrency Mint Inc. (eCurrency) emerged the recommended vendor.
The recommendation of eCurrency as the preferred solution provider was endorsed by the Public Investment Management Secretariat (PIMSEC), now the Public Investment Appraisal Branch (PIAB) and the Public Procurement Commission (PPC). Accordingly, an invite was sent to eCurrency to submit a bid on the Request for Proposal to partner with BOJ to pilot a CBDC. The final eCurrency proposal and bid evaluation were submitted to Cabinet for approval which was received in March 2021.
In evaluating all bids, BOJ took an agnostic and pragmatic approach with respect to the technology. This was evident from the mixture of technological solutions inclusive of traditional, hybrid and blockchain technologies that were assessed in the various phases.
At the end of the short-listing phases, the solution chosen met all the requirements of the Bank in that it: provides the ability for BOJ to conduct all the currency management processes of a central bank as listed above; provides seamless integration with the existing financial market infrastructures in Jamaica, in particular the JamClear® Real Time Gross Settlement System (RTGS), at the earliest possible timeline and allows for quick scalability.
The fact that BOJ chose a non-blockchain solution does not mean that we have any issue with blockchain technology, and the possibility exists that BOJ might use blockchain technology in other ways at some point in the future. In addition, the fact that blockchain is not being used at the source to mint, issue and redeem Jamaica’s CBDC does not prevent wallet providers from incorporating blockchain in their network systems to deliver CBDC to their customers.
BOJ continues to work with eCurrency on the implementation of the pilot which began in May of this year and will end December 2021. We look forward to national rollout in the first quarter of 2022.
Editorial note: Natalie Haynes is the BOJ Deputy Governor Deputy Governor in charge of Banking and Currency Operations and Financial Markets Infrastructure Divisions. This article was published in the Jamaica Observer: https://bit.ly/3z6iljj