SCAMMERS and other fraudsters will not be able to use the central bank’s digital currency (CBDC) in their illicit activities, the Government has promised.

Closing the debate on amendments to the Bank of Jamaica (BOJ) Act, which will set the legal framework for the national roll-out of the digital currency as legal tender, leader of Government Business in the Senate, Senator Kamina Johnson Smith said the currency can only be used for local transactions, and not across international platforms.“It is limited to domestic transactions where we are now — maybe that will change — but the model now is for domestic transactions. The CBDC model is not currently being used for international transactions, so it can only circulate what is already here,” Johnson Smith explained. She stressed that the CBDC is another layer of protection in the anti-money laundering and combatting of financial terrorism framework.She gave the assurance after Leader of Opposition Business Senator Peter Bunting said his side supports the Bill but that there was a national security aspect that required proceeding with caution to ensure that people do not use it as a vehicle to commit financial crimes.He pointed to the national security minister’s statement in the sectoral debate that annually, US$1 billion of illicit proceeds from scamming, drug dealing, and money laundering is used to run criminal organisations.

“My familiarity with the sector tells me that includes the use of cryptocurrency, and we have to, therefore, be very careful that nothing in this Bill facilitates the ease or expansion of those criminal enterprises in evading he scrutiny of law enforcement agencies such as MOCA and the FID,” Bunting said, as he pointed to the recent fleecing of customers of one commercial bank, within days, of $18 million.“It really brings home to us that as we proceed in this direction, which we must, we must proceed with caution so that we don’t end up inadvertently making it easier for criminals and their facilitators to access the illicit proceeds of crime,” Bunting stated.However, he said, a digital currency can significantly reduce the risk for businesses like retail outlets and petrol stations that handle a lot of cash in their daily operations, and which crimminals tend to target.

“To the extent that we can move a lot of that into the digital currency realm, I think that will be a positive in reducing the risk of harm and exposure to violence by legitimate business operators. So, we support the introduction of the central bank digital currency,” he told the Senate.Bunting also emphasised the importance of the BOJ rolling out a robust education and sensitisation campaign, as there is still some scepticism about the use of mobile wallets.

“There is a vacuum of information for the average person, and I think we have to break it down and get the information out there as much as possible,” he encouraged. A pilot of the CBDC was launched by National Commercial Bank from August to December 2021, an initiative which Johnson Smith said had been successful and was an indication that there is significant interest in the model.The changes to the BOJ Act give approval for the national roll-out of the CBDC/Jamaica Digital Exchange (Jam-Dex) starting this quarter of the financial year.