After successfully navigating several phases of the central bank digital currency (CBDC) roll-out, the Bank of Jamaica (BOJ) has disclosed that it cannot launch Jam-Dex fully until critical legislative amendments are approved and passed by lawmakers.
The BOJ said previously that the full roll-out is expected sometime this year.
At the same time, head of business transformation and innovation at National Commercial Bank (NCB) Tesfa Rhodes has indicated that NCB is still waiting on the BOJ to outline some of the regulations which will guide the use of Jam-Dex in the island.
While speaking at the Jamaica Observer Business Webinar, Rhodes responded to queries on whether Jamaicans will be required to keep a minimum amount of Jam-Dex in their digital wallet “we are still awaiting regulatory guidance and framework from the BOJ to cement what those constraints will be, but there’s no minimum requirement at this time.”
With regards to those concerns, deputy governor of banking & currency operations & financial markets at the BOJ Natalie Haynes informed “the central bank is not imposing any limit at all on CBDC wallets, whether minimum or maximum. We said before that CBDC is treated like cash, so if somebody has a wallet with $1 that’s their business and that is between them and their bank. We are going to allow the banks to apply their own risk-based assessment to their customers and determine the limit for Jam-Dex for each customer.”
In the absence of the framework Rhodes alluded to, Haynes pointed out that Jam-Dex accounts will be guided by existing legislation in the Proceeds of Crime Act (POCA) amendment which speaks to a tiered know your customer (KYC) model.
Tiered KYC allow for simplified customer due diligence requirements to be applied to certain categories of consumers based on the assessment of a financial institution. This include, among other things, the requirement for only one form of government-issued identification from the applicant for the business concerned, or accepting forms of identification other than government-issued identification. This essentially means that Jamaican will require less in terms of actually meeting the identification requirements to open a Jam-Dex account.
“I would hasten to say that under POCA there is a cash transaction limit for entities of $1 million, that does not apply to CBDC simply because CBDC is not anonymous,” said Haynes.
In the meantime, Rhodes noted that NCB has certain guidelines in place even though the full framework has not yet been communicated with NCB.
“At NCB there are some guardrails that are being established to ensure that we operate Jam-Dex accounts within some guidelines. Right now we do not necessarily see a floor for CBDC but certainly we will seek to establish some tiers of use that doesn’t exceed prescribed amounts.”
Meanwhile, he disclosed that NCB is working in collaboration with telecommunications companies as well as the central bank to ensure that the digital wallet application being offered can be accessible without an additional cost for connectivity or to purchase the application.
“The applications that are being made available now are available on your Apple store or Google Play store, as in the case of Lynk. I presume in the future there would be other such various interests who would be delivering solutions to the various market space. At this point in time I do not anticipate any cost in accessing the application, certainly for Lynk and NCB in particular. Because its technology-based and it does require network connectivity to be operational, we are working closely with the BOJ to ensure that data service requirements are not a part of what is required to use the solution,” Rhodes stated.
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