THE National Commercial Bank (NCB), which is the first financial entity approved by the Bank of Jamaica (BOJ) to distribute Jam-Dex, has indicated that consumers will be able to move their digital currency around with ease.
Speaking at a recent Jamaica Observer Business Webinar, head of business transformation and innovation at NCB, Tesfa Rhodes, said, “the technology currently developed and in place supports interoperability and that’s a key part of what will make this entire thing successful. So, we are reasonably assured that once the other players come on stream, we will be able to transfer Jam-Dex from NCB to those entities likewise we will be able to receive transfers.”
According to the Bank for International Settlements (BIS), interoperability allows participants in different systems to conduct clear and settle payments or financial transactions across systems without participating in multiple systems.
Director of Payment System and Policy Department at the BOJ, Mario Griffiths, said interoperability was high on the central bank’s agenda when conceptualising how Jam-Dex would be used.
“When the Bank of Jamaica started this journey of implementing a CBDC one of the main requirements was interoperability. Prior to this journey there were existing mobile wallet providers in the market and one of the major issues we identified at that time was interoperability,” said Griffiths.
In a 2021 study entitled Central Bank Digital Currencies: System Design and Interoperability, the BIS highlighted that “domestic interoperability would need to be sufficient to achieve an easy flow of funds to and from other payment systems and arrangements. Central banks would have options in how they achieve interoperability, from use of established messaging, data and other technical standards to building technical interfaces to communicate with other systems. Yet barriers to interoperability would likely exist, covering technical, commercial and legal aspects. Dialogue with stakeholders would be key in addressing these.”
In addition to being able to move your Jam-Dex from one wallet provider to the next, consumers will also have the option of converting their Jam-Dex to physical cash.
This is in line with the view that, at least in the near to medium term, many Jamaicans may prefer to continue using cash. This option is also necessary to facilitate Jamaicans who are unbanked.
“What we do recognise is that there’s a significant portion of our population who currently do not operate bank accounts or are not a part of the formal banking sector and as such the tools and systems that are being designed to offer Jam-Dex takes that into consideration,” Rhodes explained.
With this in mind, director of IT at Advanced Integrated Systems Bovel Blake advised, “the ecosystem will need to not just focus on the unbanked but also those who are banked to essentially make the push much broader for it to be successful on a practical basis.”
Blake stressed that overall accessibility will be a major factor in the take-up of Jam-Dex among Jamaica noting that the merchants themselves will have to be equipped to accept Jam-Dex payments.