Innovation key to the future of money and cash – RBNZ

New Zealand’s money and cash system is at a “cross road” and innovation is necessary to build a sustainable future, Adrian Orr, Governor of the Reserve Bank of New Zealand – Te Pūtea Matua has told a conference of angel investors.

A statement from the Reserve Bank says Orr told the conference: “We must decide how best to use digital technology to modernise central bank money, while we continue to ensure cash remains an option for those who need it. An innovative approach is needed to support a more efficient and resilient cash system, and the changes required are potentially far reaching.”

The bank is commencing Central Bank Digital Currency (CBDC) proof-of-concept design work, taking into account the public’s feedback received during recent consultation. The work will be a multi-stage and multi-year effort, and no decision has yet been made on what form of CBDC was right for New Zealand.

“The technology exists now to implement a CBDC, but it needs to be well designed. At a basic hygiene level, a CBDC must be user-friendly, resilient to cyber and other operational risks, and enable privacy. These features promote widespread trust and use,” Orr said.

He referred to the resounding feedback from the public on the importance of privacy in their money.

“We believe that a CBDC can be designed in such a way that privacy can exist alongside design features that make it hard for central bank money to be used for nefarious or illegal purposes. The emphasis we place on privacy reflects the fact that the CBDC design will be driven by broad community, rather than specific commercial, interests.”

A CBDC would provide a platform for economic and financial innovation, including competition in the payments and settlement sector, cross-border transfers, and financial inclusion and capability building tools.

Consultation on an issues paper, Future of Money – Cash System Redesign (Te Moni Anamata – He Whakahou i te Pūnaha Moni) closes on 7 March 2022, with about 190 submissions received so far. The paper sets out issues facing the cash system, largely driven by falling transactional cash use, and raises options including requiring banks to offer cash services and retailers to accept cash.

Also see:

Visited 21 times, 1 visit(s) today

Comments are closed.

 Two new directors at Rabobank

Chartered accountant and experienced director Laurissa Cooney and Rabobank New Zealand CEO Todd Charteris have been appointed to the board of Rabobank New Zealand. The bank’s chair, Chris Black says

Read More »

Share with considerable care

A 2024 privacy survey found that 70% of people were likely to consider changing service providers in response to poor privacy and security practices. By Privacy Commissioner, Michael Webster.  There

Read More »
Close Search Window