The Bank of Jamaica (BOJ) has been given the authority to issue Central Bank Digital Currency (CBDC) as legal tender locally, with the Senate’s passage of the Bank of Jamaica (Amendment) Act, 2022 at Gordon House on Friday (June 3).
The Bill was passed in the House of Representatives on May 24.
Consequent on the legislation’s passage, the way has been paved for the BOJ to proceed with the national rollout of the CBDC – Jam-Dex.
The pilot was undertaken between August and December 2021.
Minister of Foreign Affairs and Foreign Trade and Leader of Government Business in the Upper House, Senator the Hon. Kamina Johnson Smith, piloted the Bill during the Senate’s sitting.
She noted that full CBDC implementation is expected to significantly reduce traditional challenges associated with many Jamaicans not having a bank account.
“The main reasons given include not enough money [as] they feel you have to have [a significant sum of] money in order to have a bank account… [or] they don’t have the documentation required,” she said, noting that Government is dealing with the issue of lack of documentation through the rollout of the National Identification System (NIDS).
Senator Johnson Smith said the implementation of the CBDC will address other challenges “because no bank account will be required”.
“What you now will have is a wallet. So, you will get a CBDC wallet issued by banks or authorised payment service providers with simpler, customer-friendly processes for easy access. It is also anticipated that the CBDC will lower the cost associated with providing a national means of payment and provide an alternative to the issuance of bank notes,” she added.
Senator Johnson Smith said the CBDC will also allow businesses to engage in more efficient cash management.
“It is instant and doesn’t come with cash handling fees. Similarly, its facilitation ensures that both households and businesses will be able to use the CBDC to make payments and to hold value,” she pointed out further.
Following contributions by several members on both sides of the aisle, the Bill was passed unanimously without amendment.