The central bank of Jamaica says legal approval a must before monitoring customer’s personal transactions tied to CBDCs.
Batting for Customer Protection
The Bank of Jamaica (BOJ) – Jamaica’s central bank – made an important announcement recently saying that despite the technological ability to do so, interested authorities must not use customer’s digital wallet transaction information and details.
As reported by the Jamaican Observer today, the central bank said that even though customer’s personal information and transactions can be closely monitored when using its version of a central bank digital currency (CBDC), any party interested in doing so must get court approval.
The lender of the last resort said in a report:
“This information is not shared with the Bank of Jamaica and any other authority due to customers’ confidentiality and data protection. This information can only be shared under a court order.”
Notably, the bank added it would only capture general data for its economic analysis and assessments.
To date, a total of $230 million worth of CBDC has been minted under the central bank’s CBDC pilot exercise that is poised to come to a conclusion in December 2021. With the official name of the CBDC expected to be announced soon, the national rollout of the sovereign digital money is expected in 2022 following a successful pilot which ends on December 31.
Per sources close to the matter, the BOJ expects the launch of the CBDC to bring about considerable cost savings.
At present, the production of physical currency is done by a third party via a procurement process where the BOJ tells the concerned entity the exact number of banknotes to be printed and the coins to be minted.
However, for the CBDC, the bank has the ability to mint the CBDC on its own by virtue of its ownership of the underlying technology. Further, the cost involved in minting a digital currency is much lower than that of physical currencies.
CBDCs in the Americas
While the idea of CBDCs is still very novel, countries the world over are already banking big on the potential of sovereign digital money.