Bank of Jamaica extends eCurrency deal ahead of full-scale CBDC rollout
Central bank digital currency (CBDC) infrastructure support provider eCurrency has announced the extension of its existing arrangement with the Bank of Jamaica for a full-scale rollout.
Jamaica and eCurrency entered into a five-month partnership to explore a retail CBDC pilot known as JAM-DEX in August 2021. However, development into the project began in April, and whispers of a full-scale rollout may have prompted the signing of a long-term partnership with the Bank of Jamaica.
“Bank of Jamaica is pleased to partner with eCurrency in the national rollout of JAM-DEX to the Jamaican people,” said Deputy Governor Natalie Haynes. “JAM-DEX will be a game changer in the country’s digital transformation by enabling unbanked and underbanked citizens to be part of the formal financial system, thereby enabling access to other financial products.”
eCurrency CEO Jonathan Dharmapalan described the partnership as one that could improve the present status of the financial sector in the country, saying that the deal would cement Jamaica’s status as one of the leading countries in terms of CBDC development.
Jamaica was among the first countries to confer legal backing to the digital versions of their local currency by elevating it to legal tender. Amendments to the Bank of Jamaica Act granted powers to the central bank to be the sole issuer of the CBDC with the ability to mint, distribute, and redeem JAM-DEX.
Under the revised law, commercial banks will be empowered to distribute JAM-DEX to the public, while the central bank concerns itself with issuing the digital currency.
“We are honored to be the technology partner for the Bank of Jamaica CBDC,” said Dharmapalan. “Jamaica is leading the world in issuing a true CBDC that is a digital bearer instrument distributed alongside its notes and coins.”
Roadblocks are militating against the launch of JAM-DEX
The Bank of Jamaica has highlighted some hiccups that could potentially slow down the adoption of the CBDC ahead of a launch in December 2023. The banking regulator disclosed this at the Public Administration and Appropriations Committee (PAAC) meeting, with a dearth of merchants being the main challenge.
“The advantages are clear, but if you don’t have people coming on board but whatever advantages that there may be won’t be achieved, so it would be a good idea that will never manifest,” said Fitz Jackson, a member of parliament.
Currently, only the National Commercial Bank is fully operational to deploy the CBDC, while the Jamaica National Bank is making strides in developing a mobile wallet to support the CBDC.
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