Sat | Feb 17, 2018

GraceKennedy exploring bitcoin wallet

Published:Friday | December 22, 2017 | 12:00 AMSteven Jackson
GraceKennedy CEO Don Wehby shows off the GK MPay mobile wallet app at its launch on d February 7, 2017. The conglomerate is now researching the possibility of bitcoin transactions through the wallet.

​Food and financial services conglomerate GraceKennedy Limited wants to explore the possibility of loading its mobile wallet, branded GK MPay, with bitcoins or other cryptocurrencies.

It would require approval from the Bank of Jamaica (BOJ), which regulates mobile money services.

"Our research team is looking at it now. It is still early days," said GraceKennedy CEO Don Wehby. "GK MPay is regulated by the BOJ, so we would need guidance from our regulator. We are actively monitoring the space," he said.

Wehby added that the team was examining both bitcoin and other cryptocurrencies.

Calls to National Commercial Bank on whether it is similarly pursuing a cryptocurrency component for its mobile wallet Quisk were unanswered.

In August, deputy governor of the BOJ, Livingstone Morrison, reportedly said the central bank had established an internal group charged with monitoring cryptocurrency developments. The central bank did not respond to requests for comment on its current position on cryptocurrencies.

GraceKennedy's mobile wallet can be used for remittances, bill payment, peer-to-peer transactions, and payment for goods and services at more than 150 participating retail outlets.

However, in October, Wehby indicated that subscribers to GK MPay use it largely to buy phone credit rather than for transactions such as consumer purchases or bill payment. GraceKennedy reasoned then that the wallet was still in its early stages and public-education campaigns were needed to sell its benefits.

Since that time, the first mobile wallet provider, Conec, has exited the market, saying it was failing to gain traction among consumers.

Bitcoin, the most popular cryptocurrency, made millionaires out of holders of coins this year. That's because its value jumped nearly twentyfold from January to December, moving from US$960 to more than US$19,000 this week, before retreating to around US$17,000.

Although the cryptocurrency has been fluctuating wildly, it has been gaining momentum since mid-November when it was trading for US$8,000. Contextually, in calendar year 2016, Bitcoin doubled from US$430 to about US$960.

At its presented value, a bitcoin costs more than $2.2 million in Jamaican currency, but persons can buy coins in fractions.

There are reportedly over 1,000 cryptocurrencies, with bitcoin being the most valuable and widely circulated. The cryptocurrency began trading on two exchanges in the United States in the past two weeks, namely the CME and the CBOE.

Persons use these digital currencies to pay for goods and services, via vendors that accept them. But unlike popular online wallets such as PayPal, holders of cryptocurrencies are also susceptible to digital currency fluctuation, and hackers.

Locally, a bitcoin exchange called Caricoin was reported last year to be exploring the possibility of setting up operations in Jamaica. The company, which originates in the United Kingdom, requires approval from the BOJ to operate and has been in discussion with the central bank.

Deputy Governor Morrison said then that preliminary discussions were under way with Caricoin, even while signalling that the issuing of permits would have to follow the development of a regulatory framework for cryptocurrencies.

The Jamaica Stock Exchange will host a session on bitcoin at its annual capital markets conference in January. Last year, the stock exchange held sessions on blockchain, which is the underlying technology for cryptocurrencies as well as some financial services.

steven.jackson@gleanerjm.com