Jamaican administrators have confirmed the development of a digital marketplace for merchants and residents to interact using its central bank digital currency (CBDC).
A report from the Jamaica Observer noted that the initiative, led by the Ministry of Industry, Investment, and Commerce, is designed to improve the metrics around JAM-DEX, the country’s CBDC. Speaking at Expo Jamaica 2023, the head of the Ministry, Senator Aubyn Hill, confirmed the creation of the digital marketplace which he said will onboard new users in the coming week.
Hill disclosed that the marketplace would operate as an e-commerce platform allowing users to pay for goods and services using CBDCs. Administrators are confident that creating a national e-commerce platform will increase the use of its state-backed digital currency.
Although only a handful of merchants are currently active on the platform, Hill said there is strong potential for growth when more wallet providers and merchandisers are onboarded. Hill believes that the project will be instrumental for the financial inclusion of “new, young businesses” and providing healthy competition in the space.
“The Ministry of Industry, Investment and Commerce believes that providing the marketplace is the responsibility of the Government of Jamaica, as any marketplace developed by a private sector firm might not be acceptable to other private sector firms,” Hill said.
A group was formed to develop the marketplace drawn from ITC experts from the private sector, officials from the Bank of Jamaica, and the Ministry of Industry, Investment, and Commerce. Payment platform Lynk will steer the development with its Chief Product Officer John-Matthew Sinclair leading the working group.
“We’re looking at the technology to overcome the logistics issues…We want to leapfrog the problem of logistics with the use of [the] technology,” Hill noted.
Incentive programs to boost adoption
In April, the Ministry of Finance launched a series of incentive programs to increase the adoption numbers of the CBDC. The Ministry announced that it would be giving $164 to the first 10,000 merchants that register with the platform, while regular users will receive loyalty points redeemable as a 2% cashback on purchases.
The Bank of Jamaica has only recorded total transaction volumes of $357 million since launching the CBDC, with less than 190,000 residents signing for the JAM-DEX wallet. Other perks include reducing its Know Your Customer (KYC) requirements for residents without regular bank accounts, while merchants will receive a basic CBDC toolkit including stickers.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: Blockchain provides perfect foundation for CBDC
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