- The Reserve Bank of New Zealand (RBNZ) considers launching a digital version of the New Zealand dollar to provide universal access to central bank money.
- The proposed digital currency aims to offer certainty and safety, ensuring accessibility to all residents.
- RBNZ emphasizes the importance of maintaining monetary sovereignty amidst the rise of volatile crypto assets.
- Residents are encouraged to participate in shaping the features of the digital currency through online surveys and submissions.
Universal Access to Central Bank Money
The Reserve Bank of New Zealand (RBNZ) is exploring the possibility of introducing a digital version of the country’s physical cash. This initiative aims to offer universal access to central bank money, either in physical cash or digital form. Currently, New Zealanders only have access to the physical form of central bank money. With the proposed digital currency, RBNZ seeks to ensure that everyone has access to a secure and reliable means of financial transactions.
In a consultation paper released recently, RBNZ emphasized the importance of providing certainty and safety through digital cash, accessible to all residents. The move signifies a shift towards modernizing the country’s monetary system while addressing the evolving needs of the digital era.
Differentiating Digital Currency from Cryptoassets
RBNZ highlighted the distinction between its proposed digital currency and volatile crypto assets issued by private entities. While cryptoassets may offer digital alternatives for transactions, they are not denominated in New Zealand dollars. The proliferation of such assets could pose risks to the economy and monetary sovereignty. Maintaining monetary sovereignty allows New Zealand to independently manage its money, set interest rates, and make decisions without external influence.
The digital version of the New Zealand dollar, backed by the government and denominated in the local currency, aims to reinforce confidence in the country’s monetary system. By ensuring government backing and alignment with the national currency, RBNZ aims to mitigate risks associated with external digital currencies.
Engagement and Participation
As part of the consultation process, RBNZ encourages New Zealanders to contribute their insights on the features they would like to see in the digital version of the New Zealand dollar. Residents can engage in this process through online surveys or by submitting written documents, facilitating a collaborative approach to shaping the future of digital currency in New Zealand.