The first 100,000 Jamaican citizens to use the country’s new central bank digital currency (CBDC) known as Jam-Dex will be given a free $16 payment in the hopes of promoting widespread adoption.
Jamaican prime minister Andrew Holness first announced the news in a Facebook post on Thursday. The post received a mixed response as some Facebook users praised Holness for “embracing a digital future” while others expressed concern about the motivations of the Jamaican government, accusing Holness of trying to “bribe” citizens into the federal banking system.
According to the Jamaica Observer, approximately 17% of the Jamaican population is currently unbanked. While social media users postulate about government motives, the Observer points out that remaining unbanked is both costly and time-consuming for poorer Jamaicans. It is hoped that this new payment incentive, among others, will encourage low and middle-income citizens to join the national banking system.
The announcement comes as the Bank of Jamaica (BoJ) officially completed its eight-month-long pilot program for Jam-Dex on Dec. 31 last year, and it is expected to complete a national rollout as soon as next month. The BoJ further outlined that all Jamaicans with pre-existing bank accounts will be automatically eligible for Jam-Dex digital wallets.
Jamaican Finance Minister Nigel Clarke said in a speech to the country’s House of Representatives on Wednesday that Jam-Dex must achieve widespread adoption by citizens and their businesses in order to be successful.
According to the report provided by the BoJ on Feb. 17, the new digital currency will be called Jamaica Digital Exchange or Jam-Dex for short, and comes with its own logo and the following tagline: “No cash, no problem.” The BoJ expects the currency to be launched as soon as next month.
The name Jam-Dex was met with a great deal of criticism for both technical and aesthetic reasons. While the Jam-Dex is potentially making reference to the fact that currencies are “exchanged” and that it is both “digital” and “Jamaican,” the terminology has created a good deal of confusion for many.
Users on Twitter were quick to point out the obvious misnomer in the currency’s namesake, as Jam-Dex is simply a digital currency whereas “DEX” in crypto parlance refers to a decentralized exchange, a place where cryptocurrencies are bought and sold.
Despite China being one of the first countries to announce the development of its CBDC, the digital yuan, countries in the Caribbean have quickly become leaders in the adoption and proliferation of CBDCs. The Eastern Caribbean Central Bank (ECCB) rolled out its own CBDC, DCash, to eight different member countries.
The adoption of DCash, however, has been mired after a crash on Jan. 14 saw the central bank-backed digital currency go offline for nearly two months. It wasn’t until Wednesday that the ECCB announced that DCash was once again fully functional, stating the reason for the crash was an “expiring certificate” on the Hyperledger Fabric that hosts the DCash ledger.
Numerous other countries around the world are beginning to experiment with the implementation of CBDCs, with the Philippines announcing plans to launch Project CBDCPh as recently as Tuesday. Iran, Kenya and the European Union are also among the most recent countries to begin looking at introducing some form of CBDC.