What Is a CBDC?
Jamaica Becomes the First Country to Recognize CBDC as Legal Tender.
Table of Contents
Blockchain
Jamaica Becomes First Country to Recognize CBDC as Legal Tender
By Werner Vermaak
Coin Market Cap Alexandria looks at the central bank digital currency (CBDC) of Jamaica that was recently made legal tender — and how it works.
Jamaica Becomes First Country to Recognize CBDC as Legal Tender
Table of Contents
What Is a CBDC?
Why Did Jamaica Develop a CBDC?
How Does the Jamaican CBDC Work?
Conclusion
In a historic move, the Bank of Jamaica (BoJ) has made the island country the first in the world to recognize its central bank digital currency (CBDC) as legal tender. The nation has a largely cash-based economy, and it’s hoped that by implementing the CBDC, many of the unbanked will be able to improve their financial situation.
The CBDC, which is called the Jamaica Digital Exchange (Jam-Dex), is now issuable by the central bank following legislative action by the senate. While Jam-Dex has been in pilot testing since last year, it hasn’t officially been released into the world, though it will be as soon as later this month.
Bank of Jamaica Governor Richard Byles has said that the new CBDC can be used to “settle any debt in Jamaica. It is the medium of exchange. It is the medium of account.”
What Is a CBDC?
Compared to their closest cousin in the world of cryptocurrencies – stablecoins – CBDCs are supposed to be even a notch more trustworthy and dependable. They are issued by governments, as opposed to private companies in the case of stablecoins, and they can always be exchanged on a one-to-one basis for the physical currency of the particular nation.
While not meant as a replacement for traditional money, they share essentially all of the same features as fiat but in digital form. Critics of CBDCs point to the power of governments to shut off specific people’s access to the coins as well as track movements and expenditures. However, it’s clear that their essentially worldwide rollout is nearly inevitable at this point, with over 100 countries, representing 95% of the world’s economy, either exploring or developing them.Jamaica
