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New Zealand’s Central Bank Shows Interest in Digital Currency

Finance

cryptoknowmics.com 30 September 2021 03:30, UTC
  
Reading time: ~2 m

New Zealand’s central bank is considering the idea of its own central bank digital currency (CBDC) and wants public feedback on its recently released discussion papers on the merits of issuing a Kiwi digital dollar.

New Zealand's Central Bank Wants Public Feedback on Digital Currency

The Reserve Bank of New Zealand ( Te Pūtea Matua) has issued two new discussion papers the Te Moni Anamata, Kaitiakitanga (The Future of Money, Stewardship), and Te Moni Anamata, Aparangi ā Te Pūtea Matua (The Future of Money, Central Bank Digital Currency).

The financial institution is now asking for public feedback on its discussion papers to get a better idea of how they should move forward and access the CBDC in a digital form of money alongside cash.

“We’re seeking public input on how we should perform our role as steward of money and cash, and how we should assess the case for central bank money in a digital form alongside cash,” explains assistant governor Christian Hawkesby in a statement on Sept. 30.

In the discussion paper, RBN highlights that a central bank digital currency would be useful in the development of central bank money and that “it would both support the value anchor role of central bank money, and support the ability of central bank money to act as a fair and equal way to pay and save."

The RBNZ says the issues paper is intended to explain to the public "how we see the abstract advantages and disadvantages, costs and benefits, and risks and opportunities that a CBDC might offer".

Developing a CBDC Will Take Time

The central bank of New Zealand wants the public consultation of its discussion paper by December 6 with further plans to release more papers in November specifically around cash and how to achieve efficiency and resilience.

The RBNZ acknowledges that developing a CBDC is not a matter of quick game and will take time given the "inherent complexities, multiple design choices and policy choices to be made". Hence, this calls for a "multi-stage approach to policy development, with this Issues paper being the first of many should we confirm our position on the case for a CBDC."


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