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Central Bank Digital Currency to Facilitate Financial Inclusion

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#Jamaica, November 30, 2021 – Deputy Governor of the Bank of Jamaica (BOJ), Natalie Haynes, says Central Bank Digital Currency (CBDC) implementation is consistent with the Government’s overall financial inclusion strategy.

CBDC is a digital form of central bank-issued currency and, therefore, is legal tender that can be exchanged dollar for dollar with physical cash.  Households and businesses will be able to use CBDC to, among other things, make payments as now obtains with cash.

“Financial inclusion is access by all to financial services and products [and] is a critical factor of Jamaica’s digital transformation. The Bank of Jamaica contributes to this by acting in its role as technical secretariat of the country’s national financial inclusion strategy,” Mrs. Haynes notes.

Through the CBDC, the BOJ will contribute to the financial inclusion process by enabling Jamaicans to seamlessly access financial products and services.

“CBDC is simply a digital form of money issued by a central authority. The Bank of International Settlements defines CBDC as a digital payment instrument denominated in the national unit account that is a direct liability of the central bank. In other words, the Central Bank is responsible for the CBDC that is issued,” Mrs. Haynes explains.

“With amendments to the Bank of Jamaica Act, CBDC will become legal tender. Legal tender means that all merchants, whether for goods or services, will confidently accept CBDC and know that they will get value for the good or the service that they provided,” she adds.

Mrs. Haynes points out that the CBDC should not confused with cryptocurrency.

“CBDC is not a cryptocurrency. A cryptocurrency is privately issued, and it’s not backed by a central authority. So,  you have some of them out there [such as] Bitcoin, Ethereum and Ripple,” she informs.

The Deputy Governor tells JIS News that the central bank will be using the hybrid approach in introducing its CBDC.

“BOJ will not be issuing CBDC directly to retail customers. We are going to be issuing directly to deposit-taking institutions (DTI) that are licensed under the Banking Services Act; these are commercial banks, building societies, and merchant banks,” Mrs. Haynes outlines.  She adds that in order to foster financial inclusion, “we will also issue to a group called payment service providers, that are currently operating and testing payment products in the bank’s FinTech regulatory sandbox”.

The BOJ will be issuing CBDC to payment service providers and DTIs who, in turn, will distribute it to their customers, clients, merchants and consumers through either an E-money wallet, card networks or other digital options for persons and entities to utilise in transactions.

“In this case, the BOJ issues to wallet providers (the collective name for DTIs and payment service providers) on a wholesale basis, just as we do with physical cash. When a bank wants physical cash, they place an order with BOJ and then they send their cash in transit courier to BOJ to collect the cash. In this case, they will still place their orders with BOJ, and we will issue them with the digital currency,” Mrs. Haynes explains.

The Deputy Governor is reassuring Jamaicans that the CBDC will add to the current pool of retail payment instruments in Jamaica, such as debit and credit cards, as well as prepaid cards offered by payment service providers.

“Think of it, basically, as cash that you have in your wallet. In this case, you’re going to have a digital purse or wallet. It is not e-money, which is a liability of e-money issuers, and, of course, because it is very much like cash, it does not earn interest. CBDC in Jamaica is going to be only for domestic use and will not be used for cross-border transaction,” Mrs. Hayes says.

She points out that one chief benefit of the CBDC is that there will be a more inclusive system for persons where every citizen will have a quick, safe and reliable digital retail payment instrument.

“It’s more efficient than cash. It is instantaneous, even for remote transaction, meaning you don’t have to be in front of the person. For cash, you have to be in front of the person to exchange cash. We can do person to person, person to business, and it goes both ways,” Mrs. Haynes adds.

She says the CBDC is also an incentive for persons who are apprehensive about the formal banking system to reap benefits if they plan to start a business.

“For example, you have a CBDC wallet with bank ‘A’ and then after a couple months of operating, your bank knows you and you can say ‘hey, I need a loan for my medium to small or microbusiness’; it gets you into the formal system. If your bank doesn’t know you and doesn’t know you exist, then it’s going to be very difficult to obtain those facilities,” Mrs. Haynes tells JIS News.

To access the CBDC, the Deputy BOJ Governor says customers will need to have a wallet, which is going to be different from your regular bank account.

“Of course, it’s going to be much easier and simpler to obtain with streamlined and simplified Know Your Customer (KYC) requirements,” Mrs. Haynes states.   She also states that once an individual has a relationship with a bank, in that they already have a bank account with them, they can automatically get a CBDC account.

For those who are unbanked or do not have an account, then DTIs and authorised payment service providers will be able to onboard these individuals, who can then request a CBDC account.

To carry out CBDC transactions, consumers will be able to access, download and deploy a mobile wallet app on any mobile phone, tablet or similar device using the networks of both major telecoms service providers.

Customers will be able to top up their accounts with CBDC through all authorised agents or smart ABMs and do business using CBDC phone-to-phone with merchants.

“To get CBDC wallet, simply contact your wallet provider of choice. If you do not have a bank account, all you need when setting up your CBDC account is your name, Tax Registration Number (TRN), and government-issued photo ID (driver’s licence, passport or voter ID card),” Mrs. Haynes said.

When the CBDC is fully launched, all Jamaicans will be eligible for a CBDC wallet subject to the simplified KYC and the wallet providers’ risk assessment of the customer.

The BOJ is slated to commence national rollout of the CBDC platform during the first quarter of 2022.

It is anticipated that, by then, additional deposit-taking institutions (DTIs) will be onboarded to enable the issuing of wallets to facilitate an expansion of the number of individuals and businesses utilising the currency.

National Commercial Bank (NCB) is currently the sole DTI participating in the CBDC pilot, which commenced in June and is slated to conclude in December.

 

By: Lisa Rowe

Release: JIS

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JAMAICAN STUDENTS GAIN SCHOLARSHIPS TO STUDY IN CUBA

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KINGSTON, April 25 (JIS):

Fifteen young Jamaicans have gained scholarships to pursue tertiary training in medicine, nursing and civil engineering in the Republic of Cuba, under the Jamaica-Cuba Bilateral Scholarship Programme.

Speaking at the awards ceremony for the students, held at the Embassy of Cuba in St. Andrew on April 24, Minister of State in the Ministry of Foreign Affairs and Foreign Trade, Hon. Alando Terrelonge, said the scholarship component of the partnership is one of the many successes for Jamaicans.

“Through this valuable programme, the Government of Cuba has consistently invested in the educational development of Jamaican students, through the provision of well-needed and appreciated undergraduate and postgraduate scholarships, primarily in Medicine and Health Sciences,” Mr. Terrelonge said.

He highlighted that the long-standing, meaningful and mutually beneficial bond of friendship and cooperation has been shared between Jamaica and Cuba for more than 50 years and has provided invaluable support to Jamaica, with several agreements in the areas of Health, Science, Culture, Sports, Tourism and Education.

The Minister of State said that Jamaica is grateful for the unwavering support towards Jamaica’s development, adding that “not only are we close geographical partners but our relationship is based on, among other things, mutual respect and strong people-to-people connections”.

Mr. Terrelonge told the students that they have succeeded in securing their places in the various programmes and have proven themselves to be the “crème de la crème, having successfully undergone a rigorous selection process”.

“I commend you for your drive, hard work and dedication towards your educational development,” he said.

“As you prepare to depart Jamaica for diverse and vibrant Cuba, I encourage you all to continue to work diligently in your respective fields of study, to remain faithful to the goals you have set for yourselves, and to fly, even higher, the Jamaican flag in Cuba. It is my hope that you will not only meet but exceed your and your families’ expectations,” the State Minister added.

He also encouraged the students to view the scholarship not only as an opportunity to advance academically but to also “immerse yourselves in the rich culture of the Cuban people” and to form new connections, build networks, explore new adventures, improve their Spanish-speaking skills, and to stay connected with the Jamaica Embassy in Havana.

Under the full scholarship, tuition, accommodation, meals, clothing allowance, study materials and medical care are covered by Cuba.

The programme is administered by the Embassy of the Republic of Cuba in conjunction with the Scholarship Unit of the Ministry of Finance and the Public Service and other entities. Every year, the Cuban Government invites applications from persons wishing to pursue undergraduate and postgraduate studies.

 

CONTACT: GARFIELD L. ANGUS

 

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GROUND BROKEN FOR HIGH SCHOOL AT CHRISTEL HOUSE

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KINGSTON, May 1 (JIS):

Ground has been broken at the tuition-free Christel House at Twickenham Park, St. Catherine, for the construction of a high school.

Minister of Education and Youth, Hon. Faval Williams, who delivered the keynote address at the site, today (May 1), said Christel House’s dedication to breaking the cycle of poverty and empowering vulnerable children is “nothing short of inspiring”.

“Your decision to invest in Jamaica speaks volumes about your belief in our nation’s potential, and your dedication to making a meaningful difference in the lives of our youth is appreciated,” Minister Williams said.

She added that the partnership between the Government and the organisation, forged through a Memorandum of Understanding (MOU) in 2019, is a “prime example” of what can be achieved when public and private entities come together with a shared vision and purpose.

Further, the Minister said a foundation is being laid for a brighter future, one where every child has the opportunity to thrive and fulfil their potential, regardless of their circumstances.

She said that Christel House Jamaica, which now operates a kindergarten school at the location, will in time be more than just a school.

“It will be a symbol of optimism, a sanctuary of learning, and a catalyst for positive change in our community,” the Minister said.

“By providing comprehensive support, including education, nutrition, healthcare, and mentorship, Christel House will empower students to break free from the chains of poverty and chart a course towards a better tomorrow,” she added.

Mrs. Willliams said the shared goal between the Administration and Christel House extends beyond the construction of a building, as it is about nurturing the next generation of leaders, innovators, and change-makers who will shape the destiny of the nation.

“Together, we are sowing the seeds of prosperity, equity, and social justice, ensuring that no child is left behind,” she said.

The school provides breakfast, lunch and an afternoon snack, as well as transportation for children living far distances from the school. It also provides uniforms and textbooks, and counselling services for its students who have to contend with psychological and other emotional issues.

Founder of Christel House International, Christel Dehaan, emigrated from Germany to the United States (US) in 1962, and was an accomplished businesswoman.

In 1996, she sold her global enterprise, Resort Condominiums International (RCI), which had offices in 38 countries, and devoted her resources to philanthropic work from her headquarters in North Meridian Street, Indianapolis.

With support from dedicated donors, schools are run in India, Jamaica, Mexico, South Africa, and the US.

 

CONTACT: GARFIELD L. ANGUS

 

 

 

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VISITOR ARRIVALS NOT NEGATIVELY AFFECTED BY TRAVEL ADVISORIES KINGSTON, May 1 (JIS): 

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KINGSTON, May 1 (JIS): 

Jamaica’s visitor arrivals have not been negatively affected by travel advisories, says Minister of Tourism, Hon. Edmund Bartlett.

Addressing Wednesday’s (May 1) post-Cabinet press briefing at Jamaica House, he said travel advisories are the “purview” of Jamaica’s international partners.

“In evaluating what they regard as the state of our three Ss – safety, security and seamlessness – they do gradings. It is our job to ensure that at all times when the grades are done, that we are at the highest level of their evaluation,” Mr. Bartlett said.

He further shared that Jamaica is working feverishly at removing those elements that are considered to foster a negative evaluation.

“We are working also with our diplomatic partners to enable a better understanding of the Jamaican situation, and also we are relying heavily now on Jamaica’s history of strong, safe and secure experiences,” Mr. Bartlett said.

He pointed out that Jamaica has a 42 per cent repeat business, which is the highest in the region and the incidents that occur are limited in relation to the visitor population.

Stopover arrivals for the 2023/24 fiscal year are estimated at 2.96 million, reflecting a 9.4 per cent increase, while cruise arrivals are estimated at 1.34 million, up by nine per cent from the previous period in 2022/23.

“I’m happy that the market does not share the views of much of the advisories that come to us; that’s why we’re able to give you the numbers that we gave,” the Minister said.

CONTACT: JUDANA MURPHY

 

 

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