There has been a lot of buzz over the last two months about central bank digital currency (CBDC).

In February, the Bank of Jamaica (BOJ) announced the name, logo, and tag line for Jamaica’s CBDC; Jamaica Digital Exchange (JAM-DEX) — no cash, no problem.

Who can forget Finance Minister Dr Nigel Clarke’s now historic transaction using the Lynk app to pay his barber, Paul, using JAM-DEX.

Dr Clarke also announced that the Government would be depositing $2,500 worth of JAM-DEX into the accounts of the first 100,000 people with a CBDC account. That effectively means individuals who sign up for a Lynk account can qualify to receive $2,500 in JAM-DEX.

With digital wallets, digital currency, and the transformation of our local FinTech space still being so new to Jamaicans, here’s a quick breakdown of everything you need to know about CBDC/JAM-DEX and Lynk.

First things first, what is CBDC? It is the digital version of the regular banknotes and coins that we know and use. Because the central bank of the country issues it, in this case the Bank of Jamaica, that makes it legal tender to conduct transactions in the same way as regular banknotes.

Another critical thing to note is that CBDC is NOT cryptocurrency. While some CBDCs use the same blockchain technology as cryptocurrency, because a central bank regulates CBDCs it is not classified as a cryptocurrency.

Only a few countries have developed and implemented CBDCs. Jamaica is the third country in the Caribbean to introduce its digital currency.

Jamaica Digital Exchange (JAM-DEX for short) is the official name of the island’s CBDC. Ashley Payne created the name and also crafted the tag line. Along with Gerrard Harvey, who designed the currency’s logo, they were winners of a BOJ competition to find the elements to represent the CBDC.

To use JAM-DEX, Jamaicans will need a digital wallet. Like your regular wallet or purse, it holds your money, cards, and identification information. The only difference is that this wallet exists solely on your mobile devices.