AS part of its thrust towards achieving financial inclusion through digitisation, the Bank of Jamaica (BOJ) has plans to work with the Government of Jamaica to promote the use of it central bank digital currency, JamDex, as a means of payment.

Addressing the topic ‘Digital Currency as a Pathway to Financial Inclusion’ during the Fintech Islands Experience Summit, which was held October 5 – 7 at the Hilton Barbados hotel, Dr Novelette Panton, division chief, Financial Markets Infrastructure Division, Bank of Jamaica, shared that one of the motivation for creating the CBDC was to bring more people into the financial system.

“This forms part of the digital transformation of the country,” she explained further to Annalee Babb, a consultant in the Ministry of Foreign Affairs and Foreign Trade in the Government of Barbados, who moderated the discussion.

“We want a means of payment that would further digitise the ecosystem, so we introduced JamDex,” Panton continued.

After an eight-month-long pilot programme with JamDex in 2021, the Bank of Jamaica began widespread issue of the CDBC through mobile wallet provider NCB this year. According to Panton, up to the end of September, Lynk had onboarded 115,000 subscribers and processed 146,000 transactions.

“They have gone so far as to get merchants on board because it makes no sense you have a digital currency and people don’t know where to spend it,” Panton stated.

To this end, she said that both the central bank and Lynk are working together to also recruit corner shops and pan chicken vendors to use the mobile wallet and, by extension, conduct transactions with JamDex.

But with a recent survey indicating that over 500,000 Jamaicans “do not have a relationship with the local financial sector”, Panton pointed out that the central bank’s next strategy will be targeting government payment to social protection programmes to achieve greater financial inclusion and adoption of the CBDC.

“When we look at the persons we have, Government in any country is the largest payer. So we are going after government payments in that we have welfare payments, social benefit payments, the payments that are made to schoolchildren, payments to persons for housing benefits,” she elaborated.

Panton informed the gathering that the BOJ has partnered with the Ministry of Labour and Social Security, Ministry of Local Government and Rural Development and Lynk on a national sensitisation and education campaign. As part of this initiative, the BOJ and its partners are informing the public on the difference between JamDex and cryptocurrencies as well as the security of the digital currency.

Additionally, the central bank has been “selling financial literacy”.

“We have been speaking and communicating in a very simple way why it is important for you to start using digital cash,” Panton said.

“At the end of this month, we have these Christmas work programmes. We are trying to get persons for this December to take part of their payment in CBDCs. So this is what we’re trying to do,” she added.

Answering a question on building a financially inclusive ecosystem, Panton said that to achieve this would mean influencing people to make savings, investments and insurance. However, she pointed that what now obtains is that some people earn wages in cash and spend it without interacting with players in the financial services sector.

She added that building an inclusive financial ecosystem would need the integration of utility companies and telecommunications providers.

Following the panel discussion, Jamaica Observer asked Panton if making social protection payments through Lynk as the only mobile wallet will not create a monopoly. She, however, responded that there are other mobile wallet providers preparing to come to market and are currently testing their products in the BOJ’s regulatory sandbox.