The evolving trends in cash utilization and the innovative transformations within the realm of currency provide us with an opening to consider expanding the scope of central bank money to encompass a widely accessible digital manifestation. This trajectory allows us to consistently address the requirements of the people of New Zealand. The diminishing prevalence, endorsement, and availability of physical currency in New Zealand, coupled with the emergence of inventive private currency solutions such as stablecoins, create an auspicious juncture to contemplate the introduction of a central bank digital currency (CBDC).
The issuance of digital currency by the Reserve Bank of New Zealand would serve to uphold the trust of New Zealanders in their financial transactions, safeguard the stability of our financial system, and enhance payment systems by streamlining efficiency and fostering groundbreaking advancements. A CBDC would additionally promote financial inclusion and overall well-being, as it would be accessible to all members of society.
New Zealand is currently in the exploratory phase regarding the potential issuance of a CBDC. This exploration is structured around a four-stage process. During the first phase, a document was released in September 2021 outlining the perceived abstract advantages and disadvantages, costs and benefits, as well as the associated risks and opportunities associated with a CBDC. This document serves as the initial point of discussion with stakeholders to discern the potential role of a CBDC within the New Zealand context.
In the ongoing second phase, there is an active investigation into high-level design options for the CBDC, along with an evaluation of the corresponding costs and benefits. To facilitate this process, dedicated policy and project teams have been established, alongside a CBDC Forum to gather feedback from stakeholders. External technical advisors are being consulted to ensure that the policy groundwork is firmly rooted in viable technical possibilities.
The culmination of Stage 2 is projected to occur later in 2023 or early 2024.
Source:
https://www.rbnz.govt.nz/have-your-say/2021/future-of-money-central-bank-digital-currency