THE Bank of Jamaica (BOJ) is building out an ecosystem of digital wallet providers which will include both commercial banks and authorised payment service providers, the central bank indicates.

A plan to launch its digital currency, Jam-Dex, for national use this Friday is awaiting the engagement of more members in the distribution network. Currently, National Commercial Bank (NCB) is the only wallet provider operating in the market through its digital wallet, Lynk.

The BOJ communicated to the Jamaica Observer, “NCB will facilitate the distribution of Jam-Dex at no cost to its customers, as such NCB customers who use Lynk will not face any charges. However, large merchants using other platforms will face some charges.”

Jam-Dex, the BOJ’s central bank digital currency, is being positioned as a major device for cutting banking expenses.

Minister of Finance Dr Nigel Clarke said in his recent budget address that Jam-Dex can be used to make payments and store value, allowing “the remote transfer of funds, anywhere and anytime which reduces the hassle faced with cash transactions today. You can transfer to anyone in Jamaica who has an electronic wallet anywhere and at any time.”

Without cash handling fees, he said that Jam-Dex allows businesses more efficient and cheaper cash management. The BOJ is hoping to see increased adoption both by merchants and other financial institutions, which could result in costs falling.

The central bank emphasises the elimination of costs as usage increases. It notes that conducting payments with Jam-Dex is free of data charges as wallet providers apply zero-rating to their wallet applications.

The central bank also notes that the underlying technology (traditional/conventional) and operational processes serve to reduce human interaction and increase the speed of transaction processing thereby reducing the cost as well.

Finally, it was noted, interoperability between the digital wallets of various providers will facilitate the transfer of Jam-Dex at any time to anyone, which reduces the need for processing on other networks and attendant costs.

It is projected that 70 per cent of the Jamaican population will start using the new digital currency within the next five years.

The BOJ has projected replacing at least five per cent of Jamaican dollars in circulation each year going forward. The government offered $2,500 to new digital account holders who responded and opened accounts by that date.

Brian Boothe, senior general manager of corporate and commercial banking at NCB, told the

Business Observer in March, “NCB’s Quick Save Account and Lynk offer fee-free alternatives for Jamaicans and enable broader financial inclusion.

“These accounts are for customers who meet the low-risk profile and are subject to limits on total balances and transaction amounts. The NCB Financial Group fully endorses and supports the push to onboard 100,000 Jamaicans.”