The Reserve Bank of New Zealand has published two issue papers that assess the viability of a central bank digital currency (CBDC). The central bank is also seeking public participation on the matter.
The public has been given until December 6, 2021, to issue their feedback on the matter. The two issue papers are titled, “The Future of Money – Stewardship and the Future of Money – Central Bank Digital Currency.
Seeking Public Input
In the press release, the Assistant Governor for the bank, Christian Hawkesby, stated that the ban sought public opinion on how the body should move forward in matters CBDC while maintaining its role as a steward of money and cash.
The area of focus of the two issue papers is the general purpose of CBDCs. They also evaluate how both individuals and business enterprises can use CBDCs to facilitate transactions.
The RBNZ also stated that if a CBDC is found viable and if it is ever developed, it will be used alongside the country’s fiat currency. However, it noted that cash transactions in the country were dwindling despite the increased supply of cash in circulation; most transactions are being facilitated using digital platforms.
Hawkesby further added that “As stewards, we want to ensure that our central bank money remains a stable value anchor for the monetary system and available as a fair and equal way to pay and save – so ensuring that New Zealanders have access to money in forms that suit them and their changing needs. These outcomes mean that New Zealand keeps its monetary sovereignty.”
Countries Racing towards CBDC Development
New Zealand is just in its first steps towards CBDC developments. However, other countries have already made great strides, with some already being in the testing phase before a public rollout is made, after which CBDCs will be made official.
Some Central Banks of smaller economies have already issued their CBDCs. China is the frontier among developed economies, as the digital yuan is in its final rollout phases. Many other countries are also in the testing phase.
Hawkesby further noted the benefits realized when a CBDC works alongside the country’s fiat currency. This would digitally transform New Zealand’s economy, as cash and private money are held in commercial bank accounts.