The Government of Jamaica 🇯🇲 has passed a law to govern the use of its CBDC (central bank digital currency), Jam-Dex. The law – the Bank of Jamaica (Amendment) Act, 2022 (the “Amendment”) was recently passed in the Parliament’s Upper House, having already received approval from the House of Representatives in May.
The objective of the Amendment is to exclusively empower Jamaica’s Central Bank – the Bank of Jamaica – to issue Jam-Dex.
CBDC as legal tender
Jam-Dex is not the first CBDC to be rolled out by a country in the region. For instance, the Bahamas’ Sanddollar and the Eastern Caribbean’s DCash are already live.
Notwithstanding, there is a slight but important nuance with Jam-Dex: the Amendment recognizes it as legal tender. Strictly speaking, this means that the Jamaican digital currency is on an equal legal footing with physical bank notes issued by the BOJ.
Much of the coverage so far has, rightfully, picked up on this difference in approach. It has even been deemed a global first.
It is left to be seen whether this will practically impact the most important issue with digital currency rollouts: take-up by intermediary financial institutions and, by extension, the wider public. During the pilot phase so far, there appears to be some hesitancy to jump in.
Possible cybersecurity regulations coming
Of note: the Amendment also reserves power to the BOJ to make cybersecurity regulations for intermediaries and recipients utilising Jam-Dex. It is not yet clear what timelines the BOJ has in mind for rolling out these regulations.
A copy of the Amendment’s bill can be viewed here:
An explanation of Jam-Dex via #MoneyMattersJA: