The Bank of Jamaica (BOJ) is again making an appeal for eligible wallet providers to join the Jam-Dex ecosystem.
Division chief of the Financial Markets Infrastructure Division at the BOJ, Dr Novelette Panton, noted that building out a strong ecosystem is crucial to the success of the overall CBDC roll-out.
“We can have all the innovations that we want but we want the merchants (the persons who are providing the services) to get into the ecosystem and get into the business also,” Panton stressed.
Wallet providers refers to entities which offer an app that allows digital currency users to store and retrieve their digital assets.
Interest providers are advised to get involved with the BOJ’s FinTech Regulatory Sandbox which became effective on March 16, 2020. The sandbox provides a platform to encourage innovations in financial services, promote competition and promote financial inclusion, all while protecting consumers and mitigating risks associated with digital financial services. The sandbox is also intended to promote the bank’s improved understanding of the fintech products, services and business models currently available and inform the relevant framing of new regulations or amendment of existing regulations.
So far, only one wallet provider is a part of the Jam-Dex ecosystem. But BOJ deputy governor in charge of Banking and Currency Operations and Financial Markets Infrastructure Divisions, Natalie Haynes, is convinced that will change by year end.
“Between now and calendar year end, we’re looking to on-board two more DTI’s and a payment service provider. If it’s more then we’ll consider ourselves lucky,” said Haynes.
Bovel Blake, who is the director of IT at Advanced Integrated Systems, agrees that it will take a team of stakeholders to make Jam-Dex a success on the island; “there would have to be access points into this ecosystem so that the guy who goes to the corner shop and wants to get a jelly has no issue transacting with his digital currency; if he goes to market and wants to pay with his digital currency, there should be no issues there. The ecosystem will have to be so built up to be able to address all these payment situation as well as the financial services that we’re targeting the unbanked with. They are a significant part of the problem that we’re trying to solve.”
The Jam-Dex ecosystem within this context refers to both merchants, consumers and ensuring the proper infrastructure is in place to facilitate the ease of using Jam-Dex.
Blake maintained that setting up an efficient ecosystem will take time and may require a substantial public education drive.
“It is clear consumers want to exercise preference in terms of how they pay,” he said, continuing “the consumer has exhibited in our experience in terms of what we do a very complex sort of behaviour as it relates to payment habits and that’s something which clearly will have to be taken into account in terms of the scope of this project that having the coexistence of the physical and the digital currency.”
In the meantime, Panton expressed optimism that when more providers sign on, the competition will give the ecosystem a well-needed boost.
“I am sure when the others come on over the year or so, what we’ll see is because of the innovativeness of these wallet providers the demand is going to come from the consumers regarding the ease of access and what type of access they will need and I foresee that what will happen with the wallet providers is that you’ll see many innovative ways coming to the market to get the consumers.”
Meanwhile, Haynes maintains “all wallet providers will have to come on board before we start measuring how successful it is in terms of substitution between physical cash and CBDC.”