Jamaica’s government said it will deposit 2500 Jamaican dollars ($16) to the first 100,000 citizens to use the country’s new digital currency wallets, in a bid to boost the use of its recently unveiled central bank digital currency (CBDC), Jamaica Digital Exchange, or JAM-DEX.
The move, announced in a press release, comes shortly after the country unveiled JAM-DEX in late-February, following a nationwide contest to design the name, logo and tagline of the proposed CBDC. JAM-DEX is now set to roll out beginning from April to June.
Jamaican Finance Minister Nigel Clarke said anybody with an existing bank account can automatically obtain a JAM-DEX wallet. The government will also outline more incentives to use the new CBDC.
The more corner shops, vendors, and bars that accept JAM-DEX, is the more useful it becomes and the more widespread its use. We will incentivize corner shops and informal and formal community businesses to establish… electronic wallets and to facilitate payments in JAM-DEX.
But Clarke added that a key point of focus will be to pass legislation that recognizes the token as legal tender, and for the Bank of Jamaica to be its sole issuer.
CBDCs a growing trend
Operating on blockchain technology, CBDCs have become an intersection between sovereign finance and cryptocurrencies. Many governments have noted the usefulness of a digital currency in facilitating intra and inter-border transactions.
China was among the world’s first major economies to use a CBDC with the rollout of its digital yuan during the winter Olympics this year. U.S. President Joe Biden signed an executive order this week that will see the government begin work on developing a digital dollar.
India also recently said it was looking into the development of a CBDC.
Jamaica’s economic transformation
Jamaica’s foray into digital finance marks the result of an over 10-year economic transformation. From a massive GDP deficit in 2009, the country achieved a GDP surplus in 2019. While the COVID-19 pandemic had impacted the country’s main source of revenue, tourism, it is expected to benefit from a sharp recovery in the sector this year.
Ratings agency Fitch recently said its outlook for Jamaica’s economy is stable.