Ja­maica’s Cen­tral Bank’s de­ci­sion to pur­sue its own dig­i­tal cur­ren­cy is as much an ef­fort to reach out to the rel­a­tive un­banked seg­ment of the pop­u­la­tion as it is to con­tin­ue the West­ern Caribbean coun­try’s ef­fort to digi­tise its econ­o­my.

The Sun­day Busi­ness Guardian reached out to the Bank of Ja­maica’s deputy gov­er­nor and Cen­tral Bank Dig­i­tal Cur­ren­cy (CB­DC) im­ple­men­ta­tion com­mit­tee chair Na­tal­ie Haynes to dis­cuss the Jam -Dex’s in­tro­duc­tion to the Ja­maican pop­u­la­tion. She ex­plained the de­vel­op­ment of the dig­i­tal cur­ren­cy served a dual pur­pose.

“We still have a large per cent of the pop­u­la­tion that re­mains out­side of the for­mal fi­nan­cial sys­tem, the fi­nan­cial ex­clud­ed,” Haynes said.

“And so we want­ed, as part of the gov­ern­ment’s whole thrust for dig­i­tal trans­for­ma­tion, the Cen­tral Bank thought that it could is­sue its own dig­i­tal cur­ren­cy, which is re­al­ly just a dig­i­tal rep­re­sen­ta­tion of the Ja­maica dol­lar to our cit­i­zens, to every cit­i­zen es­pe­cial­ly for those who are now fi­nan­cial­ly ex­clud­ed. So fi­nan­cial in­clu­sion is one con­sid­er­a­tion and, of course, our sup­port for the gov­ern­ment’s dig­i­tal trans­for­ma­tion of the en­tire econ­o­my.”

Af­ter two years of test­ing the wa­ters the largest Eng­lish-Speak­ing coun­try in the Caribbean Sea is in the process of rolling out Jam-Dex, third dig­i­tal cur­ren­cy in the Caribbean af­ter the Ba­hamas’ Sand Dol­lar which was launched in  Oc­to­ber 2020 and the East­ern Caribbean Cen­tral Bank’s roll­out of DCash in An­tigua and Bar­bu­da, Grena­da, Saint Kitts and Nevis.

Hope­ful to en­cour­age Ja­maicans to be­come equal­ly ear­ly adopters of dig­i­tal cur­ren­cy, the Ja­maican gov­ern­ment has of­fered the first 100,000 sub­scribers from April 1 JA$2500 or US$16 to en­cour­age them to get dig­i­tal wal­lets to use dig­i­tal cur­ren­cy.

The in­cen­tive was first an­nounced by Ja­maica’s Min­is­ter of Fi­nance and the Pub­lic Ser­vice Dr Nigel Clarke dur­ing the coun­try’s bud­get pre­sen­ta­tion on March 10. In that pre­sen­ta­tion, Dr Clarke used the cur­ren­cy to pay his bar­ber.

Jam-Dex is a Cen­tral Bank Dig­i­tal Cur­ren­cy which is le­gal ten­der un­like cryp­tocur­ren­cy, which is pri­vate­ly is­sued, gen­er­al­ly not backed by a cen­tral au­thor­i­ty and does not per­form all the es­sen­tial func­tions of mon­ey.

Haynes ex­plained the process be­hind the even­tu­al se­lec­tion and even­tu­al de­vel­op­ment of the dig­i­tal cur­ren­cy dif­fered from the ap­proach tak­en by the Ba­hamas and the EC­CB. For one, Jam Dex is not pow­ered by blockchain tech­nol­o­gy like the Sand Dol­lar and DCash, as the Bank of Ja­maica made the de­ci­sion to chart its own course.

“We start­ed with a clean slate, took a de­ci­sion first that we are go­ing that route,” she said, “we de­cid­ed that this is where we were go­ing and how best to achieve it.”

Haynes said mul­ti­ple op­tions were re­viewed be­fore the choice of dig­i­tal frame­work around which their dig­i­tal cur­ren­cy would be de­vel­oped.

“We were ag­nos­tic(to­wards the tech­nol­o­gy) when we start­ed. We had to go through a pro­cure­ment process in terms of choos­ing the tech­nol­o­gy provider for the dig­i­tal cur­ren­cy. So we is­sued a re­quest for pro­pos­al.

“We got quite a few, over 60-odd en­ti­ties, lo­cal and over­seas en­ti­ties sub­mit­ting their bids and when we nar­rowed it down, eCur­ren­cy Mint was the suc­cess­ful one.

“They don’t use blockchain tech­nol­o­gy. And so lessons learned from the oth­er two en­ti­ties would re­al­ly be lim­it­ed in that re­gard be­cause are us­ing a dif­fer­ent tech­nol­o­gy.”

Haynes said the new cur­ren­cy was es­pe­cial­ly ap­peal­ing to those who had grown ac­cus­tomed to us­ing cred­it and deb­it cards and had grad­u­al­ly found car­ry­ing cash to be bur­den­some or in some cas­es, dan­ger­ous. How­ev­er she was wary that a large por­tion of the Ja­maican pub­lic was scep­ti­cal about dig­i­tal trans­ac­tions, and the BoJ did have a task on its hands with re­gard to en­sur­ing Jam-Dex is a safe op­tion.

“Some of them are scep­ti­cal, es­pe­cial­ly those who have nev­er used any elec­tron­ic means of pay­ment,” she said,  “For those who have been us­ing it in terms of cred­it cards, deb­it cards they see this as a gold­en op­por­tu­ni­ty to re­place phys­i­cal cash, which some of them find a lit­tle in­con­ve­nient. And, of course, not se­cure.

“In fact, if you’re us­ing phys­i­cal cash, to pay, say some small mer­chants, like you have a food ven­dor or so you’d have to be face to face, you know, to be pay­ing per­sons while with a dig­i­tal wal­let, you can pay re­mote­ly.

“Of course, the se­cu­ri­ty is­sues in terms of walk­ing around with large sums of cash, you know, you may lose it or it may be stolen from you. So that con­ve­nience and ease of use, those per­sons find very at­trac­tive.”

The next few weeks and months will prove cru­cial in earn­ing trust in the dig­i­tal cur­ren­cy. Cur­rent­ly on­ly the Na­tion­al Com­mer­cial Bank of Ja­maica has a dig­i­tal wal­let avail­able for the pub­lic with oth­er banks with­in Ja­maica set to join the par­ty in the com­ing months.

Haynes said right now the BoJ con­tin­ued to con­duct tests to en­sure when the var­i­ous dig­i­tal wal­lets come on­line, there will be flu­en­cy in the trans­ac­tions. She is hope­ful that be­tween now and the end of the April those is­sues can be ful­ly ad­dressed.

Dur­ing that pe­ri­od, Haynes is al­so look­ing for­ward to the re­quired amend­ments to the bank of Ja­maica act  that will con­firm the Bank of Ja­maica as the sole is­suer of CB­DC and for it to be le­gal ten­der in Ja­maica.

Haynes ex­plained, the switch to cur­ren­cy would not on­ly spare cit­i­zens the has­sle of hav­ing to walk with cash, but al­so save the gov­ern­ment time and mon­ey in terms of the print­ing of new notes.