Abstract:

This work studies the fundamental paradox of the Jamaican currency system, its characteristic features, positive and negative aspects. In addition, the Triffin dilemma, its features and its solutions through payment systems decentralization are also studied. Our research states that rejection of the gold and foreign currency circulation in favor of the Jamaican currency system led to the emergence of a new version of the Triffin dilemma. If a currency acquires a reserve status, there is an increase in production of this currency and an increase in demand for the currency in this state due to higher imports. As a result, the reserve currency weakens and a paradox is formed again. Thus, a strong currency that has received a reserve status will inevitably weaken. The study also found that all countries that were parties to the Jamaican agreement made transition from a foreign exchange rate, the basis of which was the gold reserve, to a floating rate. Although the Jamaican system, according to the plan of the economists, was supposed to be more flexible and get used to instability of the balance of payments quicker, its functioning triggered problems. The main disadvantage of the current Jamaican currency system is its inability to equilibrate the balance of payments and stop a sudden movement of funds and speculation. Decentralized payment systems have several advantages compared to the centralized, they can resolve the Triffin paradox with the reserve currency. Nowadays decentralized payment systems have been recognized by the business community, our research contains an example of implementation of cryptocurrency projects in Russia.