Jamaica’s CBDC Plans to Tackle Cash Issues, Says BOJ Governor

Jamaica’s Determination to Overcome CBDC Challenges

Jamaica launched its JAM-DEX central bank digital currency (CBDC) in 2021 and has been determined to find solutions for the slow roll-out and adoption of the digital currency. Despite facing challenges, the Bank of Jamaica (BOJ) is dedicated to overcoming these obstacles in order to promote the use of JAM-DEX.

Challenges and Solutions

Early adopters of CBDCs, including Nigeria, the Bahamas, and Jamaica, have encountered relatively low adoption rates. Despite having 190,000 JAM-DEX users as of March 2022, the adoption rates have not met expectations. To address this, the BOJ has implemented rolling-out incentives to encourage increased usage of the digital currency.

BOJ governor Richard Byles emphasized the unique challenges of being among the first in the world to launch a CBDC. He acknowledged that addressing one issue often leads to the emergence of another, but expressed the BOJ’s determination to navigate these challenges without a predefined roadmap.

One of the major challenges faced by Jamaica is the widespread use of cash, which has led to security issues and concerns. Byles highlighted the benefits of digital transactions and CBDCs, emphasizing that digitization is the fundamental solution to the problems associated with cash transactions.

Merchant Adoption

Despite the efforts to promote JAM-DEX, the National Commercial Bank Jamaica (NCB) remains the only financial institution facilitating transactions through the Lynk wallet. The slow merchant adoption has been identified as a key factor contributing to the lower-than-desired take-up of JAM-DEX payments.

Natalie Haynes, BOJ’s deputy governor of banking and currency operations, mentioned that larger merchants prefer a single point-of-sale machine for JAM-DEX payments. To address this, the BOJ is exploring solutions such as dynamic QR codes to facilitate seamless transactions and encourage greater merchant adoption.