Earlier this month, Jamaican Senator Aubyn Hill announced the creation of a “digital marketplace” for e-commerce to enable consumers to pay with the country’s central bank digital currency (CBDC), the JAM-DEX.
Digital Marketplace Aims
“We have various payment platforms in the marketplace now such as Lynk and Jam-Dex. However, there are still not enough people using them,” said Mr Hill talking to the Jamaican Observer. “One reason for this is that there are not enough merchants on them. I realised that there is no digital marketplace where all buyers can meet easily on a payment system.”
Lynk is the CBDC app developed by National Commercial Bank (NCB), the only bank to have launched a wallet to date.
The senator says the e-commerce platform will help small businesses advertise their products and avoid middlemen. It is particularly aimed at underserved merchants who cannot process debit and credit card transactions, thus promoting the central bank’s secondary CBDC objective of greater financial inclusion. The primary motivation is to upgrade the payment systems.
The marketplace will be developed by a consortium of private sector actors, led by Lynk’s Chief Product Officer John-Matthew Sinclair, as well as government officials and Bank of Jamaica personnel.
Identity and financial inclusion
The government of Jamaica has also been working on a national identification system (NIDS). In future this will help bring more merchants into the formal economy by using the JAM-DEX and enabling CBDC access for consumers. The NIDS is based on the existing Taxpayer Registration Number (TRN) and will allow citizens to use the CBDC without needing a bank account or even a credit/debit card.
The JAM-DEX has been targeted at the country’s informal workers to facilitate instant settlements (both online and offline) and remove existing hurdles that limit financial inclusion. Another central bank official recently said that the CBDC “is different from a regular bank account and is easier and simpler to obtain. Customers will be able to top up their wallet with JAM-DEX through all authorized agents, or smart ABMs (Automated Banking Machines), and do business using phone to phone with merchants, friends and families.”
Meanwhile, the Bank of Jamaica has launched multiple incentive programs for its CBDC, including targeting consumers and more recently aiming at merchants.