To spread awareness and enhance usage, the Government of Jamaica will airdrop US$16 (J$2,500) to the first 100,000 citizens who set up a Central Bank Digital Currency (CBDC) wallet after April 1.
Jamaica Digital Exchange (JAM-DEX)
In his opening speech during the 2022/23 budget debate in the House of Representatives this week, Minister for Finance and Public Service Dr Nigel Clarke said the main objective of the move was to encourage citizens to use CBDC as an option to trade.
The Bank of Jamaica (BOJ) unveiled the country's CBDC project in February, called the Jamaica Digital Exchange (JAM-DEX), with the tagline "No Cash, No Problem."
The initiative is part of the government's digital transformation of the Jamaican economy. According to the Finance Minister, any individual with an existing bank account will automatically qualify for the JAM-DEX wallet. The government plans to detail additional incentives for using the new CBDC, which is scheduled to be rolled out between April and early in the June quarter.
The government and the central bank will also push for the Bank of Japan to become the sole issuer of JAM-DEX and for CBDC to be recognized as legal tender.
Clarke also mentioned that the more corner stores, vendors, bars and other merchants accept JAM-DEX, the more widespread its use will be. The government also wants to incentivize businesses to set up e-wallets and make payments in JAM-DEX.
Unbanked population in Jamaica
Statistics from the Jamaica Observer show that approximately 17% of the country's population is currently unbanked. Recently, a number of countries have joined the CBDC trend. For Jamaica, the study suggests that unbanked citizens may spend more than those who have bank accounts. The CBDC may help this group of earners join the country's banking system.
For the unbanked population, the Minister said citizens will need a CBDC wallet with KYC terms.
“If you don’t have a bank account, everything needed to set up a JAM-DEX-enabled wallet will be simplified by knowing 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 ID. This will, of course, be accepted once NIDS is fully implemented.”
Meanwhile, the unveiling of JAM-DEX drew mixed reactions. While some questioned the motives behind the leaders' move, others were opposed to the nomenclature, the choice of logo and even the slogan.
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