February 26, 2023

IMF Lauds Jordan’s Capability of Rolling out rCBDC

IMF Lauds Jordan’s Capability of Rolling out rCBDC Featured Image

The International Monetary Fund (IMF) said the Central Bank of Jordan had achieved progress in rolling out the retail central bank digital currency (rCBDC), Cointelegraph quoted the IMF’s report as saying.

IMF said its mission, which was in Jordan for three months, has helped the bank to prepare a CBDC feasibility report. During its mission, which lasted from July and September 2022, the bank hailed Jordan’s existing retail payment market as largely positive and well-integrated.

The report pointed out that although the Jordanian financial sector enjoys the availability of good information security governance and management practices, rolling out an rCBDC could increase the possibilities of the financial sector’s exposure to cyber security risks.

“RCBDC may offer some benefits, but it does not necessarily address pain points. On the other hand, a cross-border rCBDC could add value, particularly if the authorities coordinate with other countries in the region,” the report read.

The pain points include a persistent cash culture and low financial literacy, which the rCBDC could not address. The IMF also urged the Central Bank of Jordan (CBJ) to rigorously evaluate benefits against risks and costs before forging ahead.

RCBDC would enhance financial inclusion by providing services to residents without smartphones. An rCBDC could also improve the domestic payment system by making its infrastructure available to PSPs and lowering the cost of cross-border transfers.

In February 2022, the Jordanian bank announced its plans to test the launch of a CBDC. It is worth mentioning that crypto trading is banned in Jordan and the central bank attempted to introduce crypto trading, which was met with resistance from the parliament.

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