The Reserve Bank of New Zealand (RBNZ) has started consultation with the public for revamping its cash and currency system. This includes reviewing a potential Central Bank Digital Currency (CBDC).
In a July 7 announcement, the Reserve Bank will release a series “of money and cash issues paper for feedback from August to November”. It will take forward issues identified during Future of Cash consultations in 2019.
The central bank aims to consult on the “issues key to the future of how New Zealanders pay and save,” Christian Hawkesby said. He is an assistant governor of the Reserve Bank of New Zealand, the country’s Central bank.
The first consultation will “introduce and seed feedback” on the huge concept of money and cash stewardship. The subsequent paper will look at the potential for a CBDC to work alongside cash as government-backed money. The authorities would also look at Issues arising from new electronic money, including cryptocurrencies like Bitcoin and stablecoins.
In the latest CBDC related announcement, Hawkesby notes that :
“The potential for a Central Bank Digital Currency to help address some of the downsides of reducing physical cash use and services is something we want to explore for New Zealand. A CBDC, similar to digital cash, might well be part of the solution, but we need to test our assessment of the issues and proposed approach before developing any firm proposals.”
The governors stated that despite fewer New Zealanders using physical cash, the ability to use it remains widely valued. It ensures inclusion and gives everyone autonomy and choice in the way they pay and save.
Hawkesby noted that digital payments are the most preferred option for the majority of New Zealanders. The bank’s “Job is to ensure that these transactions work for all New Zealanders”.
“We also know that digital forms of payment are the preferred way of paying for the majority of us, and that the future will undoubtedly involve less cash.”
Several nations seem almost certain to launch a CBDC, including China, Canada, Japan, and Sweden. Recently, the ruling party of Japan said that by late 2022, their vision for the CBDC will be more clear. Now New Zealand will join the list of countries that are working on CBDC.