With leading financial institutions cracking down against cryptocurrencies, the Bank of Jamaica (BOJ) has followed suit. As a result, Jamaican citizens have been issued a warning from the BOJ to be cautious about crypto transactions.
BOJ Concerned Over ‘Volatile’ Cryptocurrencies
The Bank of Jamaica has become the latest in a long line of Central Banks feeling uneasy towards cryptocurrencies. According to a report published by Jamaica Observer’s Business Observer, the BOJ has grown increasingly cautious about cryptocurrencies. According to the report, 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.
The biggest concern BOJ has with regard to cryptocurrencies is their volatility.
BOJ’s CBDC Initiative
BOJ’s concern with the volatility of cryptocurrencies might be the reason why the bank is working with Ireland-based technology firm eCurrency Mint for the rollout of its central bank digital currency (CBDC), tentatively scheduled for early 2022. BOJ announced this plan earlier in March 2021, following the government’s favorable views of a digital society and economy following the COVID-19 pandemic.
Central Banks Clamp Down On Crypto
The Bank of Jamaica is not the first central bank to show concern over the global wave of cryptocurrency adoption. Financial institutions of several other countries are also highlighting the issues of million-dollar transactions through an unregulated medium like crypto. As a result, some countries are taking a stricter approach to control the trend. For example, India is developing legislation to ban cryptocurrencies by criminalizing possession, issuance, mining, trading, and transferring cryptocurrencies.
Financial Watchdogs Continue Global Crypto Crackdown
In a report published in June 2021, the Bank for International Settlements (BIS), the global body of central banks, dismissed cryptocurrencies and stable coins. The BIS targeted Bitcoin specifically, calling out its high energy footprint as well as its role in financial crimes like money laundering and ransomware attacks. The strongly-worded report was the clearest sign yet from central banks that they are not ready to allow cryptocurrencies the support needed to realize their role in the global financial system fully.
In its report, the BIS said,
“Central banks are at the heart of a rapid transformation of the financial sector and the payment system. Innovations such as cryptocurrencies, stable plains and the walled garden ecosystems of large technologies tend to work against the public interest that supports the payment system.”
However, the BIS endorses the development of CBDCs and says it could be a tool to achieve greater financial inclusion and reduce the high cost of payments.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.