Te Pūtea Matua, the Reserve Bank of New Zealand (Reserve Bank) has called for public opinion regarding the issuance of a Central Bank Digital Currency (CBDC) in NZ and the stewardship of cash. The call was made via press release and encourages citizens to submit feedback by December 6 with key components including:
The future of money - stewardship: Feedback on how the Reserve Bank should steward money and cash.
The future of money - central bank digital currency: Feedback on how the Reserve Bank should propose a CBDC and whether it is the right move for the country.
The future of money - cash system: Feedback on the report set to be released in November regarding issues facing the current cash system in New Zealand.
The announcement comes soon after the passing of the Reserve Bank of New Zealand Act 2021 (the Act) which recognises the Reserve Bank’s role as overseeing the functioning of the cash system, ensuring that cash in New Zealand is fit for the public, and monitoring and assessing the impacts of innovation in money and payments on the public’s need for cash.
The papers issued by the Reserve Bank show a significant intention to consider digital currency in light of the potential benefits it may provide to the country's declining use of cash. Following the release of the papers, Assistant Governor Christian Hawkesby said:
Commercial banks, the wider cash industry and Te Pūtea Matua (the Reserve Bank) need to seize opportunities and innovate to ensure that the cash, money and ways to pay continue to serve New Zealanders’ needs.
The Reserve Bank seems to be taking a measured approach to the implementation of digital currency, deciding to consider its potential while also focusing on the future of fiat currencies. In the press release Hawkesby noted the importance traditional cash still has:
Today we are broadening our consideration to the Future of Money. We still have work to do to preserve cash and the cash system for those that need it. At the same time, trends in cash use and availability along with digital innovation create opportunities to innovate as well as challenges.
The Reserve Bank is encouraging all interested businesses, experts, advisors and individuals to submit feedback to help decide the best approach to the new technologies.
The news has come after a momentous month for CBDC regulation with the US Federal Reserve also recently hinting at their own CBDC.