The Reserve Bank of New Zealand (RBNZ) has initiated a 101-day public consultation to seek feedback on the principles and design options for the country’s digital currency. However, the central bank plans to further discuss the issuance of a central bank digital currency (CBDC) in future consultations.
The RBNZ has implemented a four-stage approach to CBDC issuance and aims to launch an in-house 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 relevant stakeholders, and budgeting.
On April 17, the central bank published a consultation paper to gather insights for “future work on whether digital cash is suitable for New Zealand.” The consultation period will conclude on July 26.
The consultation paper advocates for the adoption of CBDC while emphasizing the importance of aligning with other central banks and addressing the declining usage of physical cash. It poses 12 questions across four key areas: personal opinions on New Zealand’s CBDC, the benefits of digital currency, strategic design, and controlled issuance. According to the RBNZ, launching a CBDC alongside a robust supporting infrastructure can stimulate innovation in the local payments sector.
Furthermore, the RBNZ is working on alternative formats for the consultation paper on digital currency, which will be made available in late May.
In related news, Andrew Bayly, the minister of commerce and consumer affairs of New Zealand, recently expressed concerns about the country’s slow approach in 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 provided eight key recommendations to re-engage with the global crypto wave. These recommendations include implementing policies and regulations to encourage the development of digital assets and blockchain technology, fostering greater collaboration between the government and industry players, and more.
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