The Reserve Bank of New Zealand (RBNZ) opened a 101-day public consultation on the principles and design options it created for the nation’s digital dollar. However, the central bank plans to discuss the issuance of a central bank digital currency (CBDC) in future consultations.
RBNZ has taken a four-stage approach to CBDC issuance and aims to issue an in-house digital dollar by 2023. New Zealand’s central bank is in the second stage of its digital cash initiative, which involves exploring high-level design options for digital cash and related consulting and budgeting.
On April 17, the central bank released a consultation paper to help determine “future work on whether digital cash is right for New Zealand.” The consultation closes on July 26.
The consultation paper promotes CBDC adoption while highlighting the need to align with other central banks and the declining cash usage.
“Cash is no longer a core payment medium for many people. The frequency of cash use by New Zealanders continues to fall.”
The consultation paper asks 12 questions about four broad topics: personal opinion on New Zealand’s CBDC, benefits of digital cash, strategic design, and managed issuance. According to RBNZ, launching a CBDC along with a robust supporting infrastructure can spur innovation in the local payments sector.
Concurrently, the RBNZ is developing alternate formats for its digital cash consultation paper, which will be available in late May.
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Andrew Bayly, the minister of commerce and consumer affairs of New Zealand, recently warned against the country’s sluggish approach toward experimenting and adopting innovations on digital assets and blockchain technology.
In response to the inquiries by the parliamentary Finance and Expenditure Committee into cryptocurrencies, Bayly’s office said:
“The current ‘wait and see’ approach could risk New Zealand missing out on the benefits of development in the digital asset industry.”
The ministry’s advisers made eight key recommendations for New Zealand to get back on the global crypto wave, which includes adopting policies and regulations to encourage developments in digital assets and blockchain and facilitate greater collaboration between government and industry players, among others.
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