Persons with Central Bank Digital Currency (CBDC) accounts will be able to use these to receive remittances from overseas.
Governor of the Bank of Jamaica (BOJ), which is spearheading implementation of the CBDC dubbed ‘JAM-DEX’, Richard Byles, said that while individuals sending funds would have to do so using existing arrangements at their respective locations, when the money gets here, “it can go through JAM-DEX immediately to the beneficiary”.
“[Once] the person sending the money is bona fide, meaning the ‘know your customer’ (KYC) [verification process] has been done on them and on the person receiving the money, it can move immediately and seamlessly between the two,” he indicated.
Mr. Byles said he also anticipates that the remittance agencies “will make that system of transfer even more seamless and immediate”.
While noting that “there’s a bit of work to be done to get that to happen”, the Governor said: “This is where technology and banking laws are eventually going to allow us to go.”
He was speaking during a ‘Riverside Chat’ panel discussion on digital currency and cryptocurrency, at the 2022 Jamaica 60 Diaspora Conference on Wednesday (June 15).
Mr. Byles also advised that visitors to Jamaica who may wish to conduct transactions using CBDC will be accommodated.
“So just as when a tourist comes to Jamaica and wants to change their US dollars to Jamaican dollars, they do so at a Cambio or a bank, they can [also] change [those US dollars] to JAM-DEX and use it just as they would use Jamaican cash,” he indicated.
The Governor emphasised the importance of the KYC process in the CBDC’s administration.
Noting that JAM-DEX can only be used in Jamaica, he said it will be issued by commercial banks and other payment service providers “who know their customers”.
“We have to be very careful how we allow financial flows to happen between persons or institutions [to safeguard against those who may] have ill-intent, for example terrorism or money laundering. All of our commercial banks and payment service providers have to know their customers, so that [where someone] wants to move money around, it will be from a bona fide customer to another,” he pointed out.
Mr. Byles said that in cases where this interaction extends beyond Jamaica, it becomes more difficult to establish who is bona fide.
As such, he said local financial institutions have correspondent banking arrangements with overseas counterparts, which do the KYC verification in the respective countries.
Mr. Byles used the opportunity to thank members of the diaspora for their “tremendous” support to Jamaica through remittance flows, particularly over the last two years during the coronavirus (COVID-19) pandemic.
“Jamaica is such a big recipient of remittances, and it’s very important to our economy. Jamaica owes a deep debt of gratitude to the diaspora for the support they’ve shown us,” he said.
The Jamaica 60 Diaspora Conference was hosted at the Ministry of Foreign Affairs and Foreign Trade in downtown Kingston from June 14 to 16 under the theme ‘Reigniting a Nation for Greatness’.