In a bid to spread awareness and bolster usage, the Jamaican Government is all set to airdrop $16 (2500 Jamaican dollars) to the first 100,000 citizens setting up Central Bank Digital Currency (CBDC) wallets after April 1st.
Jamaica Digital Exchange (JAM-DEX)
While delivering the opening presentation in the 2022/23 Budget Debate in the House of Representatives this week, Minister of Finance and the Public Service Dr. Nigel Clarke stated that the main objective of the move is to encourage citizens to use CBDC as an option to conduct transactions.
Bank of Jamaica (BOJ) had unveiled the country’s CBDC effort, dubbed Jamaica Digital Exchange (JAM-DEX), in February, with the tagline being “No cash, no problem!”
The initiative is a part of the Government’s digital transformation of Jamaica’s economy. According to the Finance Minister, any individual with an existing bank account can automatically be eligible for a JAM-DEX wallet. The Government plans to detail more incentives to use the new CBDC, the rollout of which is scheduled for the beginning of the April to June quarter.
The Government and central bank will also push for the BOJ to be the sole issuer of JAM-DEX, as well as for the CBDC to be recognized as legal tender.
Clarke also mentioned that the more merchants such as corner shops, vendors, and bars accept JAM-DEX, the more widespread its use will be. The Government is also looking to incentivize businesses to set up electronic wallets and to conduct payments in JAM-DEX.
Jamaica’s Unbanked Populace
Stats from Jamaica Observer revealed that around 17% of the population in the country is currently unbanked. In recent times, several countries have jumped on the CBDC bandwagon. For Jamaica, the study reveals that a citizen without a bank account is likely to spend considerably more than those who do have a bank account. A CBDC could potentially help this cohort of earners to join the country’s banking system.
For the unbanked population, the minister stated that the citizens will need a CBDC wallet that has KYC provisions.
“If you don’t have a bank account, all that is required to set up a JAM-DEX-enabled wallet are simplified Know Your Customer information: name, address, date of birth, tax registration number (TRN), and a valid government-issued photo ID such as a driver’s license, passport, or voter identification card. Of course, once NIDS is fully implemented, this will be accepted.”
Meanwhile, JAM-DEX’s unveiling was met with a mixed response. While some questioned the leaders’ motives behind the move, others were up in arms on the nomenclature, choice of logo, and even the slogan.