The Bank of Jamaica has asked tech solution providers to develop and test possible central bank digital currency (CBDC) solutions. 

As per a statement published at the end of last week, those firms that are interested in taking part are to put forward details of their solutions to the Bank of Jamaica by August 7 this year.

The solutions will be trialled as part of the Fintech Regulatory Sandbox, which was established by the bank.

According to a Cointelegraph report, this will ensure consumer protection and data privacy before the information is introduced within Jamaica’s economy.

The Bank of Jamaica announced that a digital currency issued by the bank would be a fiat currency, and although it has stated it is not looking to develop a cryptocurrency, it has not been confirmed whether blockchain  - the technology that underpins cryptocurrencies – will be utilised.

Once the CBDC has been approved, it can be used by individuals and businesses as a method of payment and store of value, the Cointelegraph report goes on to add.

However, the Bank of Jamaica said that the central bank digital currency could perform more efficiently and act as a more secure alternative for payments, thereby enhancing financial inclusion in Jamaica.

In addition, deposit-taking institutions will also likely enjoy a better, more cost-effective cash management process.

According to a press release issued by the central bank: “Bank of Jamaica 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. Actively exploring the feasibility of a Central Bank Digital Currency is the latest step in this regard”.