You can use a Smart ATM or go to any Wallet Provider to convert your CBDC to cash. Your Wallet Provider is the only entity that will have access to your information and be able to see your transactions. Your Wallet Provider will ensure that your data is protected and kept private. When conducting transactions using CBDC your identity is not recorded.
In 2023 the central bank introduced financial incentives for merchants to adopt JAM-DEX which were ten times higher. It also offered consumers 2% cash back on CBDC spending of up to J$5,000 ($32). Earlier this year the Bank of Jamaica committed funds for a technology provider to upgrade 10,000 of the more modern Point of Sale (PoS) machines to support the CBDC. Vernon James, Lynk CEO, shared, “The combination of Lynk…and JAM-DEX…offers a solution to three public policy objectives in the financial system — inclusion, security and convenience.
CBDC is a digital form of central bank issued currency and is therefore legal tender. It is not to be confused with cryptocurrency, which is privately issued and not backed by a central authority. Central Bank Digital Currencies (CBDCs) are digital currencies issued and regulated by a central bank. They represent the digital form of a country’s official currency and are a direct liability of the Central bank. As such CBDCs potentially represent a radical departure from “private money alternative” of the Cryptocurrency world to date. Bank of Jamaica expects usage of Jam-Dex to be low at the start but is hoping that more persons will opt for the convenience of doing transactions via their Jam-Dex wallets over physical cash, which is costly for the central bank to manage.
Over the next few months, Lynk will be adding a digital bill payment feature to the platform and will soon shift our focus to onboarding small, medium, and large merchants, another way NCB hopes to keep the interest of existing users while attracting new ones. For example, it employs a simplified know your client (KYC) process and no money has to be put into the wallet at the time it is opened. It has the same value as the other forms of currency, so it can be exchanged one-for-one with banknotes and coins.
“Following launch of the app, we expect the number of users to double on an annual basis as new features are added,” the bank said. CBDC can be used anywhere in Jamaica that CBDC wallet services are available or the counterparty has a CBDC wallet. There is no cost to you when using your phone for CBDC transactions.
Not being required to have a bank account or to open one to get a CBDC wallet makes entry into the financial system much easier. Additionally, people who have a bank account are able to automatically obtain a CBDC account. Overall, the process makes it easier for DTIs and PSPs to bring the unbanked into the financial system. So far one other bank, JN Bank, has a CBDC wallet in the central bank sandbox, but was close to going live a year ago. The target was to get all banks into production by the end of 2023.
The system only records the value of the transaction for authentication purposes. Your Wallet Provider may share your information only if the authorities require that this information be released due to a breach in Anti-Money Laundering or Counter Financing of Terrorism.
