BOJ governor says merchants slow to warm up to JAM-DEX
Published:Thursday | October 27, 2022 | 12:10 AMEdmond Campbell/Senior Parliamentary Reporter
The Bank of Jamaica (BOJ) says that, despite the approximately 100,000 persons who have obtained the central bank digital currency (CBDC), dubbed Jamaica Digital Exchange (JAM-DEX), there has been paucity in its use, as large merchants are yet to come on board.
“If all of us have CBDC and there is no place for us to spend it, that’s a problem. We have to get the merchants on board,” noted Richard Byles, governor of the central bank.
“The merchants are the customers of the banks. So we (BOJ) can’t reach those merchants; the banks have to reach them,” Byles told members of the Public Administration and Appropriations Committee (PAAC) on Wednesday.
The central bank launched JAM-DEX earlier this year to further enable easy and secure access to digital financial products and services by all Jamaicans.
In an effort to spread the use of the CBDC, the central bank will this December use two urban constituencies as pilots.
“There are 100,000 people out there that already have CBDC. They just don’t have anywhere to spend it as they would like to, and, in Christmas, we are going to be using two constituencies as pilots to spread CBDC and to test the responsiveness of both individuals and merchants,” Byles said.
The BOJ has been holding talks with the Ministry of Labour and Social Security and the Constituency Development Fund (CDF) for them to use JAM-DEX to facilitate payments.
The constituencies where the CBDC pilots will be rolled out are St Andrew North Western and St Andrew South Eastern, of which Dr Nigel Clarke, finance minister, and Julian Robinson, opposition spokesman on finance, are the respective members of parliament.
To date, the National Commercial Bank (NCB) is said to be fully on board with CBDC and JN Bank entered the sandbox on September 1, 2022, to test a mobile wallet that will facilitate the distribution of Jamaica’s central bank digital currency.
Technical issues
Byles revealed that technical issues have influenced the low adoption of JAM-DEX by the other banks.
“Based on the various stages of readiness of eligible wallet providers, the BOJ will be strongly encouraging the participation of all banks by the end of December 2023,” the central bank governor said.
Committee member Fitz Jackson said he was not convinced that consumers and merchants were excited to utilise the digital currency.
The central bank governor said that the BOJ cannot start its mass public education exercise until the requisite infrastructure is in place to facilitate the use of the CBDC.
“The merchants have to be in a position to accept it for us to get the retailers to take it up,” he said.