The Bank of Jamaica (BoJ) has legalised central bank digital currency (CBDC) in a move to deliver an alternative to its cash-based economy, putting an end to months of speculations over its launch.
The island nation’s central bank has recognised “Jam-Dex” as a legal tender, thereby making the Caribbean nation the first country in the world to legalise CBDC. In all, about 10 countries have actually launched CBDC, including Nigeria, the Bahamas with its ‘Sand Dollar’, and several Caribbean island nations.
According to news reports, the Jamaican Senate has given the BoJ permission to issue Jam-Dex or the Jamaica Digital Exchange. Jam-Dex will be available for domestic usage later this month, according to Bank of Jamaica Governor Richard Byles.
Jam-Dex has been in a pilot testing phase since August of last year. BeInCrypto, a crypto news provider platform said it was supposed to be launched in the first quarter of this year, but delays had pushed it to the second quarter.
Jonathan Dharmapalan, the chief executive officer of CBDC technology supplier eCurrency, said: “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.”
He stated that it was important for countries to start recognising that their money can come in a digital form as well: “Since it’s digital, you don’t have to be in the same place at the same time to execute a transaction…It’s a powerful tool,” he said.
According to the Atlantic Council’s CBDC tracker, approximately 95 per cent of global GDP is now being researched or developed by 105 countries.
What is Happening in India?
In February 2022, while presenting Budget 2022, Union Minister of Finance Nirmala Sitharaman had said that Digital Rupee, the name of the CBDC in India, will be introduced using Blockchain and other technologies, sometime in 2022-23.
Reserve Bank of India Deputy Governor T Rabi Sankar has also recently confirmed that India’s CBDC will be implemented this year. The CBDC would be implemented in phases, according to Sankar.
“The process of introduction of CBDC will be gradual, so that there is no disruption to the financial and banking system,” Sankar said, according to a report in the Economic Times. Earlier, in its annual 2021-2022 report, the RBI had said that the digital rupee design must conform to India’s monetary policy and financial stability objectives, and cause no disruption.