(CMR) Offering an alternative in a cash-heavy economy, 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.
According to Bank of Jamaica Governor Richard Byles, the Jam-Dex, which has been in pilot testing since last year, 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.
A digital Jamaican dollar offers a more secure, convenient alternative to physical notes and coins and can be used without a bank account, Byles explained.
Jonathan Dharmapalan, CEO of eCurrency, which provides technology for central banks to issue and distribute CBDCs, also spoke of the benefits of digital currency.
“You can use this to settle any debt in Jamaica. It is the medium of exchange. It is the medium of account,” he said.
Dharmapalan wants other countries to recognize the benefit of digital currency.
“What is primarily important is that countries start to recognize that their money can come in digital form. 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,” Dharmapalan said.
According to Popular Science, Unlike cryptocurrencies, which are privately issued, central bank digital currencies—or CBDC, for short—are regulated and can be exchanged dollar-for-dollar with the paper currency in that country. They are not intended to replace banknotes and coins but are expected to complement them.