On Thursday, the Reserve Bank of New Zealand released two discussion papers to evaluate the use cases for a central banks digital currency (CBDC). It is now seeking public feedback.
These papers are titled: The Future of Money Stewardship and the Future of Money Central Bank Digital Currency. The central bank needs public feedback by December 6, 2021.
Assistant Governor Christian Hawkesby stated that they are seeking public input about how to perform their role as stewards of money and cash and how to assess the case for central banks money in digital form.
These papers are focused on the ‘general purpose’ of CBDCs. They evaluate the applications for individuals and businesses.
The central bank also clarified that any CBDCs issued will be available alongside existing cash currency. It also pointed out that, despite the growing cash circulation, most transactions are done digitally.
Hawkesby said that as stewards, they want to make sure that central bank money is a stable value anchor to the monetary system. He also stated that it should be available as an equal and fair way to save and pay – so that New Zealanders can have money in forms that best suit their changing needs. These outcomes ensure that New Zealand maintains its monetary sovereignty .”
CBDCs Are Turning into Reality
New Zealand is just beginning its journey towards CBDCs. However, there are many countries that have already taken the first steps. Several smaller countries have already issued digital currencies from their central banks. China leads the pack among the major economies, while many other countries are experimenting with the idea.
Hawkesby stated that a central bank digital currency would have the same features and benefits as cash, but could also work alongside private money in commercial bank accounts.