The Jamaican Government will airdrop $16 (2500 Jamaican Dollars) to the first 100,000 people who set up Central Bank Digital Currency wallets (CBDC) after April 1. This is to increase awareness and boost usage.
Jamaica Digital Exchange (JAM-DEX)
Minister of Finance and the Public Service Dr. Nigel Clarke gave the opening presentation at the House of Representatives 2022/23 Budget Debate. stated this move has the primary objective of encouraging citizens to use CBDC for 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. The Finance Minister stated that anyone with a bank account can be automatically eligible for a JAMDEX wallet. The Government will provide additional incentives for using the new CBDC. This rollout is expected to begin in the April-June quarter.
The central bank and Government will also press for the BOJ’s sole issuer JAM-DEX as well as legal tender recognition for the CBDC.
Clarke said that JAM-DEX’s widespread adoption will depend on how many merchants (such as bars, corner shops, and vendors) accept it. Businesses will also be encouraged to create electronic wallets and make payments using JAM-DEX.
Jamaica’s Unbanked Populace
According to Jamaica Observer, 17% of Jamaica’s population is unbanked. In recent years, many countries have taken up the CBDC trend. The study in Jamaica shows that citizens without bank accounts are more likely to spend significantly than those with bank accounts. A CBDC could potentially help this cohort of earners to join the country’s banking system.
The minister said that for the unbanked, citizens will need a CBDC-wallet that contains 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.