New Zealand advises on digital cash

The central bank says the currency would be “digital cash” backed by the government, sitting alongside banknotes and coins.

Explaining the potential benefits of a CBDC, Reserve Bank Director of Money and Cash Ian Woolford says it would “support competition and innovation by enabling our powerful fintech sector.”

He continues: “Digital cash would be used primarily for payments by individuals and businesses, to pay online, in-store or even to pay your child’s pocket money, just as you can currently use cash. You could use it for new things like: B Make an instant digital payment to anyone in New Zealand.

Woolford emphasizes that any digital cash would also be private, secure and work over Bluetooth, allowing payments to be made without an internet connection.

A consultation on the issue runs until July 26, but the bank is approaching the project cautiously, promising “multi-stage exploration up to around 2030.”