New Zealand's 100-dollar note. Reserve Bank of New Zealand
The Reserve Bank of New Zealand has been considering a digital currency.
In a Thursday report on the future money, the RBNZ addressed the issue.
RBNZ believes digital transactions will increase as cash use declines in the country.
Check out more stories from Insider's business page.
The central bank of New Zealand is exploring the possibility of creating a digital currency. Officials in a Thursday report said that such a project could encourage further innovation in the country’s payments system.
The Reserve Bank of New Zealand wanted public feedback on papers that focused on the future of money. These papers included a proposal for digitized currency, at a time in which cash use is declining.
Christian Hawkesby, RBNZ Assistant Governor, stated in a statement that a Central Bank Digital Currency would have the same features and benefits as cash in the digital world and work alongside private money in commercial bank accounts.
It said that cash usage dropped to 19% in household transactions in 2019, from 30% in 2007. People are increasingly turning to mobile-based payment apps and digital wallets, as well as new and private technologies that facilitate transactions. Apple Pay was named by the RBNZ as a tool to facilitate transactions.
It stated that "the declining acceptance and availability of cash, as well as emerging innovations in private money such stablecoins make it an opportune moment to consider a central banking digital currency." Stablecoins are cryptocurrencies that can be tied to central bank-issued currencies and are backed by traditional assets like short-dated government bonds.
According to the bank, "well-designed stablecoins", which are not monopolistic in a market and limit RBNZ’s ability to affect the country's interest rate, may offer benefits like increased consumer choice and increased competition.
According to a survey conducted by the Bank for International Settlements, the majority of world's central banks are looking into the potential benefits and drawbacks for CBDCs. Federal Reserve Chairman Jerome Powell said this week that the central bank's report on a possible digital dollar was due soon. He also stated that it would be ideal to work with Congress in creating such an asset.
December 6th is the last day for public feedback to RBNZ