Early Adopters of Jamaican CBDC to Get Incentives from Central Bank

Key Insights:

• The first 100,000 Jamaicans to use the Jam-Dex, will receive $16 in their wallets.
• This is done in an effort to increase adoption.
• The CBDC incentivization has received considerable criticism from citizens.

Major world economies have taken up the CBDC road as governments aim to incentivize the use of their digital currencies for citizens.

In Jamaica, the Government recently announced that the first 100,000 Jamaican citizens to use the country’s new central bank digital currency (CBDC), Jam-Dex, will be given 2500 Jamaican dollars ($16).

Incentivizing CBDC Usage

In hopes of promoting widespread adoption of the much-talked-about Jam-Dex, the Jamaican prime minister Andrew Holness announced the news of incentivizing it through a Facebook post on Thursday.

This move was first reported by the Minister of Finance and Public Service Nigel Clarke, who said,

“This is a bid to encourage persons to utilize CBDC as an option to conduct transactions.”

The implementation of CBDC forms a crucial part of the Government’s initiative for the digital transformation of Jamaica’s economy.

According to Clarke, following a ‘successful pilot spearheaded by the Bank of Jamaica (BOJ) between May and December 2021, the national CBDC rollout is scheduled for the beginning of the April to June quarter.’

Local news media organizations note that approximately 17% of the Jamaican population is unbanked, i.e., adults who do not have bank accounts.

Despite Jamaicans’ mixed reactions to Jam-Dex, media organizations believe that remaining unbanked is costly and time-consuming for poorer Jamaicans.

The CBDC incentivization hopes to encourage low and middle-income citizens to join the national banking system. As reported by FXEmpire previously, the bank worked with eCurrency Mint, a technology solutions provider, on The Sandbox project.

Move Receives Mixed Reactions

Holness’ announcement about CBDC incentivization received mixed reactions from the community. Some praised the PM for ’embracing a digital future.’

In contrast, others expressed concern about the motivations of the Jamaican Government, accusing the Government of trying to ‘bribe’ citizens into the federal banking system.

Additionally, some users were concerned about hacking and scams through CBDCs. A comment on Holness’s Facebook post read,

“Hope they have great blockchain forensic experts and anti-hacking technologies. If not, this is just a waste of time and taxpayer money.”

The Bank of Jamaica (BoJ) highlighted that all Jamaicans with pre-existing bank accounts would automatically be eligible for Jam-Dex digital wallets.

That said, the name ‘Jam-Dex,’ has created a significant amount of confusion for both technical and aesthetic reasons. Supposedly, Jam-Dex references the fact that currencies are ‘exchanged,’ and is digital’ and ‘Jamaican.’

However, the terminology has confused many since the term Dex also stands for decentralized exchanges. That said, as reported earlier by FXEmpire, there are over 57 other countries in the research and development stages of the CBDC program.