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International Monetary Fund Advises Central Bank Of Jordan On CBDC Implementation

Milestone Date: February 23, 2023

Central Bank

The International Monetary Fund (IMF) has provided recommendations to the Central Bank of Jordan regarding the implementation of a retail Central Bank Digital Currency (rCBDC). The bank is closer to finalizing its rCBDC with the completion of the technical report provided by the IMF after a 3-month analysis.

Jordan's retail payment market received a positive review overall from the IMF, which stated it is “well integrated”. The IMF also praised the high level of smartphone integration within the country. By introducing a rCBDC, the goal of enhancing financial inclusion would be achieved, as it would cater to individuals who do not possess smartphones. Additionally, the implementation of an rCBDC can potentially enhance the domestic payment system by enabling payment service providers (PSPs) to leverage its infrastructure, thereby reducing the expenses associated with cross-border transfers.

The IMF has cautioned against disintermediation within Jordan's financial system, as it could potentially create instability during challenging economic and political periods. While the Jordanian financial sector exhibits commendable information security governance and management practices, the introduction of an rCBDC could heighten cybersecurity risks, making it an appealing target for malicious activities.

By providing these recommendations, the IMF aims to assist the Central Bank of Jordan in navigating the challenges and maximizing the benefits of a CBDC implementation in a country where cryptocurrency trading is currently illegal and is met with resistance from its parliament.

By Elizabeth Morrison

Published:February 23, 2023

Sources

News

IMF offers Jordan’s central bank recommendations for implementing retail CBDC

Cointelegraph

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