The Bank of Jamaica (BOJ) is tracking ahead of target on the circulation of the new polymer notes across the country. Nevertheless, it’s in no rush to demonetise the old currency ahead of the two-year timeline it had set.

In an update on the new notes, which were placed in circulation in December 2022, deputy governor, banking, currency operations and payment system at the BOJ, Natalie Haynes, said that 60 per cent of the notes in circulation are polymer notes.

The central bank is working to have the remaining cotton-substrate notes withdrawn from the economy but says the speed at which that is done will, in part, depend on resolving concerns around some automated teller machines’ (ATM) acceptance of the old notes.

“We are going to give things a little more time because there are still some issues with the ATMs. The banks are at about 99 per cent in terms of ATM acceptance as well as issuance of the new notes. However, some banks are still doing some retrofitting for the $2,000 note, and so we want to wait until that is achieved and we have full coverage in all ATMs across the island,” Haynes said during the BOJ’s quarterly monetary policy report press conference held on Wednesday.

That aside, Haynes said the BOJ will have to make accommodations for the destroying of the old notes, which includes giving the public advance notice of when the demonetisation process will begin. In accordance with the Bank of Jamaica Act, the old notes will cease to be legal tender three months from the date on which the notice is gazetted.

However, the old notes can still be redeemed by the bank.

“We have to give accommodation for destroying those old notes when that 40 per cent comes back in. So we think two years is adequate for all that preparation,” Haynes said.

The last demonetisation exercise carried out by the BOJ was of the one, 10, and 25 cent coins, which took effect on February 15, 2018. To boost coin redemption, the BOJ, in association with GraceKennedy Money Services, ran a public coin drive in 2018.

Jamaican coins currently in circulation are minted in denominations of $1, $5, $10, and $20 denominations and there are six polymer notes in circulation — $50, $100, $500, $1,000, and $5,000 — as well as the newly introduced $2,000 note. The $2,000 note was introduced to make it easier for the settlement of cash transactions, the BOJ has said.

The banknotes were upgraded as part of a broad strategy against counterfeiting through the incorporation state-of-the-art security features in the new series. The notes are also expected to better satisfy the needs of the visually impaired. Each of the current banknotes has a feature dedicated to the visually impaired, that is, either large numbering or tactile printing, recognised through touching.

The BOJ also says that polymer substrate will last an average of six years compared to the cotton substrate notes which last four years. Essentially, the upgrade is expected to lower costs to the BOJ.

In addition to physical cash, the BOJ is encouraging the use of Jam-Dex — its central bank digital currency (CBDC) — to co-exist in the payment space in the near to medium term.