According to statements from the Governor of the Bank of Jamaica (BOJ), Richard Byles, Jamaica is determinedly acting to resolve issues related to its central bank digital currency (CBDC), known as JAM-DEX, which was launched in 2021. However, solutions still need to be found to overcome the challenges faced with the slow spread of their CBDC.
Challenges Await Solutions for CBDC
Countries that were early adopters of CBDCs, such as Nigeria, the Bahamas, and Jamaica, have seen adoption rates that are lower than expected. As of March 2022, despite having 190,000 JAM-DEX users, it is indicated that incentives need to be more widespread to increase adoption rates.
According to Byles, there are challenges associated with being a pioneer in the world. In particular, encountering new problems while trying to solve one is becoming inevitable. However, Byles emphasizes that despite such challenges, Jamaica will continue to move forward determinedly.
Byles also discusses the security and usage difficulties encountered with the use of cash. He points out that the security threats and problems created by cash usage can be solved through digitalization. Digital transactions, credit cards, bank cards, and digital currencies like CBDCs can eliminate cash-related issues.
How Does the System Work in Jamaica?
Currently, the National Commercial Bank of Jamaica (NCB) is the sole financial institution facilitating JAM-DEX transactions through the Lynk wallet. However, it is reported that a second digital wallet provider, JN Bank, joined JAM-DEX in December 2022. This is considered a positive step towards increasing the use of the CBDC.
Natalie Haynes, the BOJ’s Deputy Governor in charge of banking and currency operations, notes that participation is lower than desired. She reveals that virtual solutions, such as the use of a dynamic QR code, are being tested due to large investors preferring Jam-Dex payments to go through a single point-of-sale machine.
Overall, it is understood that Jamaica is determinedly working to increase CBDC usage and solve cash problems, but still faces some challenges. The BOJ and other relevant institutions appear to continue evaluating various solutions for the widespread adoption of the CBDC. The development is also noteworthy in terms of showing the direction in which cryptocurrencies may evolve within central banks’ monetary processes over time.
