The completion of an International Monetary Fund technical report on Jordan's markets brings the Central Bank of Jordan closer to its next step in developing a retail central bank digital currency (rCBDC).

Last year, the IMF conducted a three-month mission to aid the bank in preparing a feasibility report on CBDC. The report was released by the IMF on February 23.

During their mission between July and September 2022, the IMF gave a favorable review of the country's existing retail payment market, stating that it was well integrated. Additionally, the report noted that two non-bank payment service providers (PSPs) offer "generally accessible and appropriate products" and that the country has high smartphone penetration.

Despite these positives, the introduction of an rCBDC would increase financial inclusion by offering services to residents without smartphones. It could also improve the domestic payment system by making its infrastructure available to PSPs and reducing the cost of cross-border transfers.

According to the IMF, it is important to avoid disintermediation in the Jordanian financial system to prevent instability during times of stress. While the IMF found that the Jordanian financial sector has strong information security governance and management practices, the introduction of an rCBDC could potentially increase cybersecurity risks as it could become an attractive target. The report concluded:

  “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.”