The Reserve Bank of New Zealand (RBNZ) has initiated a 101-day public consultation to gather input on the principles and design options for the country’s digital currency. During this consultation, the central bank will not discuss the issuance of a central bank digital currency (CBDC), but it plans to address this topic in future consultations.
The RBNZ has developed a four-stage approach to the issuance of a CBDC and aims to introduce its own digital currency by 2023. Currently, the central bank is in the second stage of its digital cash initiative, which involves exploring high-level design options, consulting with stakeholders, and budgeting for the project.
On April 17, the RBNZ released a consultation paper to gather feedback and determine the feasibility of introducing digital cash in New Zealand. The consultation period will end on July 26.
The consultation paper advocates for the adoption of a CBDC while emphasizing the importance of aligning with other central banks and addressing the decreasing usage of physical cash. It poses 12 questions on four main topics: personal opinions on New Zealand’s CBDC, the benefits of digital cash, strategic design considerations, and the process of issuing a CBDC. According to the RBNZ, the introduction of a CBDC, along with a robust supporting infrastructure, can stimulate innovation in the local payments sector.
At the same time, the RBNZ is working on creating alternative formats for the consultation paper on digital cash, which will be made available in late May.
In a related development, Andrew Bayly, the minister of commerce and consumer affairs in New Zealand, has expressed concerns about the country’s slow approach to experimenting with and adopting innovations in digital assets and blockchain technology. In response to inquiries from the parliamentary Finance and Expenditure Committee regarding cryptocurrencies, Bayly’s office has made eight key recommendations, including the adoption of policies and regulations that encourage the development of digital assets and blockchain technology, as well as fostering collaboration between the government and industry players.
Additionally, Kieren James-Lubin, an advocate for digital innovation, has answered six questions regarding the need for a unified understanding of digital currencies and technology.