Following the publication of two independent discussion documents on a digital dollar for New Zealand, the central bank has requested public input on a potential central bank digital currency (CBDC).
The two documents, named “The Future of Money – Stewardship” and “The Future of Money – Central Bank Digital Currency,” established a December 6 deadline for public consultation after the reserve bank’s announcement earlier this year that it would hold talks about a potential CBDC.
Assistant Governor Christian Hawkesby of the Reserve Bank of New Zealand stated that the cash patterns observed in the discussion papers might lay the foundation for further innovation in money and the broader New Zealand economy.
“Trends in cash use and availability along with digital innovation create opportunities to innovate. We believe these should be discussed widely and our consultations aim to encourage that,” Hawkesby said.
The central bank stated in the documents that it sees potential to broaden the reach of central bank money by introducing a central bank digital currency, which it believes would assist improve financial equality and security.
They also cast doubt on stablecoins, citing worries about their influence on financial stability and the central bank’s authority over currency issuance in the New Zealand economy.
According to Hawkesby, a digital currency would enable cash to be used more flexibly in the digital world.
“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.”
In November, a new policy document will be released that will look at ways to improve resilience and performance using a central bank’s digital currency.
Currently, central banks throughout the world are becoming more interested in CBDCs.