The Bank of Jamaica (BoJ) has legalized its CBDC as an alternative to the country’s cash economy.
According to sources, the Jamaican senate has given the central bank permission to issue the Jamaica Digital Exchange, or Jam-Dex, which is a CBDC. According to Bank of Jamaica Governor Richard Byles, the Jam-Dex will be available for domestic usage later this month.
Byles says the digital Jamaican dollar “provides a more secure, convenient alternative to traditional notes and coins, and can be utilized without a bank account.”
Since August of last year, the Jam-Dex has been in a pilot testing phase. It was expected to be launched in the first quarter of this year, but delays have pushed it into the second.
New payment methods
Jonathan Dharmapalan, CEO of CBDC technology supplier eCurrency, acknowledged the step, saying, “Legislators in Jamaica have now unanimously moved a digital dollar ahead in Jamaica.” This can be used to pay off any debt in Jamaica. It serves as a means of exchange. It’s the accounting media.”
“Because it’s digital, you don’t have to be in the same place at the same time to execute a transaction,” he said before adding, “It’s a really, really powerful tool.”
As per the Jamaica Observer, the JMMB Group, a financial services firm, plans to develop several new products, including point-of-sale, e-commerce, and new payment solutions, to help the Jam-Dex gain traction.
As per the publication, the CBDC is also being promoted by the National Commercial Bank (NCB) through its Lynk wallet.
Status of CBDC across the globe
According to the Atlantic Council’s CBDC tracker, 105 countries representing over 95% of global GDP are currently investigating or establishing a CBDC.
It also claims that ten countries, including Nigeria, the Bahamas with its “Sand Dollar,” and other Caribbean island governments, have introduced CBDCs; nonetheless, Jamaica is the first to legalize them as legal money.
Several countries are investigating alternative international payment methods. Following the imposition of financial penalties on Russia, the trend is expected to accelerate. There are nine cross-border wholesale CBDC tests (bank-to-bank) and three cross-border retail CBDC projects.
The experiments on China’s digital yuan, also known as e-CNY or DCEP, will run until 2023. In April, the pilot program was expanded to include Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen, and six cities in Zhejiang province.
The United States and the United Kingdom are the G7 economies with the most CBDC development. The European Federal Bank has stated that a digital euro will be available by the middle of the decade.
Some feel that a central bank digital dollar would give the Federal Reserve greater authority and monitoring over people’s finances.
A CBDC is being considered by 19 of the G20 countries, with 16 being in the development or pilot stage. India, South Korea, Russia, and Japan are among them. Over the last six months, all countries have made great development.
With the increasing number of countries working on a CBDC, the financial system may soon confront a serious interoperability issue. Developing diverse CBDC models provides additional pressure to set a worldwide standard for the same.