The Reserve Bank of New Zealand has opened a public consultation on the future of money and the case for a central bank-backed digital currency. The bank has published two issue papers – ‘The Future of Money – Stewardship’ and ‘The Future of Money – Central Bank Digital Currency’ – as the basis for the consultation, which will close on 6 December.
“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,” says Assistant Governor Christian Hawkesby following the release of two issues papers today for public consultation.
“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,” says Mr Hawkesby who is also the Reserve Bank’s General Manager of Economics, Financial Markets and Banking.
“As steward 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.
“Two years ago our continuing policy programme, Te Moni Anamata, was focused on the Future of Cash. 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. We believe these should be discussed widely and our consultations aim to encourage that.
“A Central Bank Digital Currency would see the features and benefits of cash enjoyed in the digital world, working alongside cash and private money held in commercial bank accounts. It could make for much more efficient and integrated platforms benefitting individuals and businesses, as well as protecting monetary sovereignty. However, any decision to issue a CBDC would need to carefully consider operational risks, such as cyber security, and impacts on the financial sector.
“Meanwhile private sector fintech innovations offering money-like products and services also offer opportunities to innovate and do things better, but may also create risks.
“We want people to know that the case for keeping cash is well understood and accepted by the Reserve Bank. Cash is here to stay for as long as some of us need it. In November we will be releasing a third issues paper that will set out the issues facing the cash system and explore high level options to achieve greater efficiency and resilience,” says Mr Hawkesby.
The Future of Money – Stewardship and Future of Money – Central Bank Digital Currency issues papers are available on our website with feedback open for 10 weeks, closing 10am, Monday, 6 December 2021.
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