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The Bank of Jamaica [BOJ], like other regulators across the world, has taken a cautious approach to cryptocurrencies. The central bank has now issued a warning against the usage of digital currencies, according to the most recent update.
As per reports, the BOJ stated,
“The bank is playing its role as a responsible central bank to caution our citizens, as we have done in the past. The last notice of this nature was issued in 2018, this is merely a reminder.”
Such apprehension is understandable, especially considering the widespread anxiety about cryptocurrencies throughout the world. Several regulators have taken a cautious approach to digital assets, with several restricting their usage for transactions. While volatility and the illegal use of assets are among the BOJ’s top worries, the BOJ is not afraid to build its own central bank digital currency, which it wants to launch next year.
The Jamaican program uses Ireland-based eCurrency Mint Inc. as the technology provider and does not rely upon a blockchain. The CBDC, according to Mario Griffiths, Director of the BOJ’s Payment System Policy & Development Department, is not a cryptocurrency and is not intended to replace cash or other payment mediums.
“A central bank digital currency is issued and backed by a central authority. In our case, it is the Bank of Jamaica. It’s a liability of the Bank of Jamaica and I want to compare that to cryptocurrencies that exist on the market. Those are issued by a private entity. It’s a claim on a private entity.”
“Some are decentralised and there are a number of decision makers that we would not know about, but in the case of a CBDC, we want persons to come to us, the Bank of Jamaica, or wherever they have their wallet, so it is totally different.”
In reality, Griffiths highlighted that the CBDC will supplement rather than replace currency. If all goes as planned, a Jamaican CBDC might be launched in 2022.