Reserve Bank of New Zealand Releases Digital Currency Consultation Paper

The Reserve Bank of New Zealand (RBNZ) has announced its consideration of launching a digital version of the country's physical cash. The RBNZ stated that this digital version of the New Zealand dollar would provide universal access to central bank money, either as physical cash or in digital form.

In a consultation paper released on April 17, the RBNZ noted that New Zealanders currently only have access to the physical form of central bank money. The RBNZ, promoting the proposed digital version of the New Zealand dollar as a solution that meets everyone's needs, expressed its desire for the "certainty and safety" of using digital cash to be accessible to all residents.

In the consultation paper, the RBNZ also attempted to differentiate between the digital version of its dollar and volatile crypto assets issued by private entities.

"Some other forms of digital money, like cryptoassets, are not denominated in New Zealand dollars. If a lot of people use them, it can pose a risk to our economy, the New Zealand dollar, and our monetary sovereignty. Monetary sovereignty is important because it means that New Zealand can independently manage its money, set interest rates, and make decisions without being overly influenced by external forces," the RBNZ said.

According to the central bank, the digital version will not only be government-backed but will also be denominated in the local currency. This allows the Reserve Bank of New Zealand to maintain its monetary sovereignty and confidence in the country's monetary system.

Meanwhile, the central bank has expressed its desire for New Zealanders to identify features they would like to see in the digital version of the New Zealand dollar. Residents can participate in this process by taking an online survey or submitting a written document.