WELLINGTON, Apr 17 (NNN-RNZ) – The Reserve Bank of New Zealand (RBNZ) is exploring a central bank digital currency, which will help enable a money and payments system that is innovative, competitive and contributes to the development of the country’s digital economy.
The “digital cash” would be a new type of money in addition to banknotes, coins and electronic money in people’s bank accounts, RBNZ Director of Money and Cash, Ian Woolford, said today.
“Digital cash would ensure that central bank money is available to all New Zealanders and able to be used digitally,” Woolford said, adding, it would be the first digital form of New Zealand currency, backed by the government and available to the public.
Physical cash in banknotes and coins would still be available, so people would have the option to use either digital or physical cash, he said, adding, people need a digital wallet, payment card or phone app to access digital cash, and would not need a commercial bank account to use it.
“Innovations in money and payments are challenging New Zealand’s monetary sovereignty,” Woolford said, citing crypto assets, distributed ledgers, smart contracts, and digital currencies issued by global technology companies.
New Zealand’s money must innovate to stay relevant and useful and ensure its monetary sovereignty, he said, adding, there is also a huge opportunity for digital cash to support competition and innovation by enabling the country’s fintech sector.
“Today, New Zealanders still cannot make instant payments electronically to other people, unless they are both with the same bank,” Woolford said.
Bluetooth can also be used to make payments without connecting to the internet, which would be useful in an emergency, or when the power is out, he said, adding, digital cash would be private, secure, and trusted as the Reserve Bank will not control or see how money is spent.
The RBNZ’s latest survey on cash use shows many New Zealanders are using physical cash less under COVID-19, which is not increasing post-pandemic.
Consultation of digital currency is open for all New Zealanders from today till July 26.– NNN-RNZ
