‘Jam-Dex’ Jamaica Digital Currency – New York Carib News
The Central Bank of Jamaica’s commitment to pursue its own digital currency is an effort made to reach the relatively unbanked segment of the population as well as to continue the Western Caribbean country’s efforts to digitize its economy.
The Sunday Business Guardian reached out to Natalie Haynes, Deputy Governor of the Bank of Jamaica and Chair of the Central Bank’s Digital Currency (CBDC) Implementation Committee, to discuss introducing Jam-Dex to the Bank of Jamaica. Jamaican population. She explained that the development of digital currency had a dual purpose.
“We still have a large percentage of the population that remains outside the formal financial system, the financial excluded,” Haynes said.
“And so we wanted, as part of the government’s overall effort for digital transformation, the Central Bank thought that they could issue their own digital currency, which is really just a digital representation of the dollar Jamaican to our citizens, to every citizen, especially to those who are now financially excluded, so financial inclusion is a consideration and of course our support for the digital transformation of the entire economy by the government.
Investigating for two years in Jamaica, I snow rolling out Jam-Dex, the third digital currency in the Caribbean after the Bahamian Sand Dollar which was launched in October 2020, and the Central Bank’s rollout of DCash from the Eastern Caribbean to Antigua and Barbuda, Grenada, Saint Kitts and Nevis.
With high hopes of encouraging Jamaicans to become equally early digital currency endorsers, the Jamaican government has offered the first 100,000 subscribers from April 1st JA$2,500 or US$16 in order to push them to get digital wallets for using digital currency.
The incentive was first declared by Jamaica’s Minister of Finance and Public Service, Dr. Nigel Clarke, during the presentation of the country’s budget on March 10. In this presentation, Dr. Clarke used digital currency to pay his hairdresser.
Jam-Dex is a central bank digital currency that is sound money unlike cryptocurrency, which is distributed privately, usually not backed by a central authority, and does not perform all of the essential functions of money.
Haynes explained that the process behind the eventual selection and eventual development of the digital currency differed from the direction taken by the Bahamas and the ECCB. For one, Jam Dex is not powered by blockchain technology like the Sand Dollar and DCash, as Bank of Jamaica made the decision to go its own way.
“We started with a clean slate, first decided we were going this way,” she said, “We decided this was where we were going and how best to get there.”
Haynes said a multitude of options were considered before choosing the digital framework around which their digital currency would emerge.
“We were agnostic (to technology) when we started. We had to go through a procurement process to choose the technology provider for the digital currency. So we issued a request for proposal.
“We had a number of entities, over 60 local and foreign entities, that submitted their bids and when we narrowed it down, eCurrency Mint was the one that was successful.
“They don’t use blockchain technology. And so the lessons learned from the other two entities would be really limited in that regard because they use different technology.
Haynes said some of the population are used to using debit and credit cards rather than carrying cash, which can be cumbersome and dangerous. However, she was suspicious that the majority of the Jamaican public was skeptical of digital transactions, and the BoJ had a job to do to ensure that Jam-Dex was a safe option.
“Some of them are skeptical, especially those who have never used an electronic means of payment,” she said, “For those who have used it in terms of credit cards, debit cards , they see this as a golden opportunity to replace physical cash, which some of them find a bit inconvenient and, of course, insecure.
“Actually, if you’re using physical money, to pay, let’s say some small merchants, like you have a food vendor or so you should be face to face, you know, to pay people while having a digital wallet , you can pay remotely.
“Of course the security issues in terms of walking around with large sums of money, you know, you can lose it or it can be stolen from you. So that convenience and ease of use, these people find it very appealing. »
The next few weeks and months will be crucial in gaining confidence in the digital currency. Currently, only the National Commercial Bank of Jamaica has a publicly available digital wallet, with other Jamaican banks expected to join the party in the coming months.
Haynes said the BOJ has continued to run tests to ensure that when the various digital wallets go live, transactions will be smooth. She hopes that by the end of April, these problems can be fully resolved.
During this period, Haynes also looks forward to the required amendments to the Bank of Jamaica Act which will confirm the Bank of Jamaica as the sole issuer of CBDCs and for it to be legal tender in Jamaica.
Haynes explained that the switch to coinage would not only save citizens from having to travel with cash, but also save the government time and money in terms of printing new banknotes.