IF you’ve heard about Jamaica’s digital currency, Jam-Dex, but still can’t figure out where to spend it, you’re not alone. The central bank reports a surge in peer-to-peer transactions, but for everyday shopping, the roll-out is stuck in a holding pattern — waiting for commercial banks to retrofit the very point-of-sale (POS) machines that would make the digital cash as easy to use as swiping a card. The promise of a cash-less future is here, but for most consumers, it remains a wallet with nothing to buy.

This infrastructure gap, confirmed by Bank of Jamaica Governor Richard Byles, is the critical barrier to mainstream adoption. “The breakthrough with Jam-Dex will happen when we get the POS machines converted,” Byles stated. “Unless you can spend it at places that use a POS machine, you have to resort to cash.”

He added: “So it’s critical, and the commercial banks know [this] is what is holding up the effective and massive roll-out of Jam-Dex.”

For the central bank, the narrative is becoming a familiar one. “I should add here that we are still working on getting the point-of-sale machines for the larger merchants retrofitted. We are doing that in collaboration with the banks,” said Natalie Haynes, deputy governor of the Bank of Jamaica. “The solution is working, it works, but it’s just to have the POS machines retrofitted and now we’re waiting on the banks.” This sentiment tracks back through all the Jam-Dex stories, which have for years highlighted merchant acquisition as the key hurdle, making the central bank’s message sound like a broken record.

For now, growth is coming from a specific, narrow use case: person-to-person payments. Just this past Thursday, Haynes, who has responsibility for financial markets and payments systems, told journalists at the central bank’s quarterly monetary policy press briefing tha t “the data for the quarter ending June shows…about a 30 per cent increase in [the] value of transactions…Of course, that is partially due to BOJ now actively pursuing communication and the events in terms of persons using Jam-Dex.”

“So, we have moved from brand awareness to more transactions-oriented events. We were very big…at Sumfest…and that has contributed to the increase in terms of merchants accepting it and individuals using it,” she continued. Sumfest is a reggae music festival held during the summer each year and attracts a wide cross section of patrons.

The strategy to spur greater use also hinges on expanding access. “We are waiting on other wallet providers to be onboarded. Two are onboarded and are distributing Jam-Dex, and we expect two more before year-end,” Haynes said. The hope is that greater use will come from “just consistent communication from BOJ, and from persons who provide other digital means of payment.” Currently, only the National Commercial Bank and JN Bank distribute the Jam-Dex digital currency.

However, these strategies for growth have yet to make a dent in the most critical metric: the total amount of Jam-Dex in the hands of the public. Despite the reported growth in transaction value and planned expansion, the data show there has hardly been any change in the amount of Jam-Dex in circulation. Since the start of the year, it has increased by just $600,000 — from $258.45 million to $259.05 million. This means Jam-Dex represents just 0.095 per cent of the total $272.6 billion in circulation — a portion that hardly puts it on the road to being “the preferred means of payment…in 10 years from roll-out, if not before,” as Haynes told this newspaper in July 2021.

This stagnation means that despite the marketing push and growing public awareness, the digital currency’s utility for most daily purchases remains limited, confining its primary use to person-to-person transfers instead of replacing the wallet-clogging cash and cards it was designed to supersede.

This creates a classic chicken-and-egg problem for consumers. Why go through the hassle of acquiring Jam-Dex if there are few plac es to spend it? Conversely, why should merchants invest time and energy into accepting it if few customers are using it?

Ultimately, the central bank is betting on a powerful economic incentive to break the logjam. Byles argues that the long-term cost savings of digital currency will ultimately align the interests of banks and businesses with the BoJ’s goal.

“Although Jam-Dex may not make them money, Jam-Dex have helped to save them. It is a very costly exercise to handle cash,” Byles said. “Banks will tell you that a big part of their costs have got to do with security, moving [and] storing of cash. And it’s the same thing for businesses too.”

He concluded that “both the banks and businesses have an interest in digital payments… even if there’s no fee to be earned off of Jam-Dex…there is a very big case of cost savings which they will eventually reap over time.”

For now, Jamaican consumers are left waiting for those eventual savings to convince their banks and favourite stores to finally make room for Jam-Dex at the checkout.

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HAYNES…we have moved from brand awareness to more transactions-oriented events. We were very big…at Sumfest…and that has contributed to the increase in terms of merchants accepting it and individuals using it.