Jamaica Becomes First Country to Make a CBDC Legal Tender

Jamaica’s central bank has officially recognized the “Jam-Dex” central bank digital currency (CBDC) as legal tender, becoming the first country to do so.

The Bank of Jamaica (BoJ) has legalized its CBDC in a move to provide an alternative to its cash-based economy.

According to reports, the Jamaican senate has authorized the central bank to issue its CBDC, known as the Jamaica Digital Exchange, or Jam-Dex. According to Bank of Jamaica Governor Richard Byles, the Jam-Dex will officially launch for domestic use later this month.

The digital Jamaican dollar “offers a more secure, convenient alternative to physical notes and coins, and can be used without a bank account,” Byles told Blockworks.

The Jam-Dex has been in a pilot testing phase since Aug last year. BeInCrypto reported earlier this year that it would be rolled out in Q1, but delays have pushed it into the second quarter.

New payments solutions

CEO of CBDC technology provider eCurrency, Jonathan Dharmapalan, confirmed the move: “Legislators in Jamaica have all now unanimously moved a digital dollar forward in Jamaica. You can use this to settle any debt in Jamaica. It is the medium of exchange. It is the medium of account.”

He stated that it was important for countries to start recognizing that their money can come in digital form, before adding: “Because it’s digital, you don’t have to be in the same place at the same time to execute a transaction…It’s a really, really powerful tool.”

According to the Jamaica Observer, the JMMB Group, a financial services organization, is looking to launch a number of new products such as point-of-sale, e-commerce, and new payment solutions to facilitate the adoption of the Jam-Dex. 

The CBDC is also being pushed by the National Commercial Bank (NCB) through its Lynk wallet, according to the outlet.

Global CBDC drive

According to Atlantic Council’s CBDC tracker, there are currently 105 countries, representing over 95% of global GDP researching or developing a CBDC.

It also reports that 10 countries have actually launched a CBDC including Nigeria, the Bahamas with its “Sand Dollar’ and several Caribbean island nations, however, Jamaica is the first to legalize one as tender.

China’s digital yuan, e-CNY, or DCEP (digital currency/electronic payment) pilots are set to continue into 2023. Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen, and six cities in Zhejiang province were added to the pilot program in April. 

The United States is the laggard in this race with policymakers and central bankers dragging their feet on any development of a crypto greenback. 

Some believe a central bank digital dollar will give the Federal Reserve a more authoritarian level of control and surveillance over people’s finances.