- The deputy governor of the Reserve Bank says that demand for cash is declining.
- The central bank is looking deeply into retail CBDCs but has no laid out plans.
The Reserve Bank of New Zealand is open to digital currencies. Still, the Assistant Governor, Christian Hawkesby, says that there are no imminent plans to issuance a central band digital currency (CBDC). Hawkesby was talking at the Royal Numismatic Society of New Zealand conference, where he acknowledged, "cash is being used less as a means of payment and access to cash is declining."
The debate surrounding the issuance of CBDC continues to catch momentum across the board. While some countries remain adamant and mute, some nations like China have made gigantic strides. As reported, China's sovereign digital currency trials are underway amid the fight against the Coronavirus pandemic. Similarly, South Korea is looking forward to testing CBDCs while the Bank of Japan (BoJ) remains uncommitted towards national digital currency.
Although New Zealand has no laid out plans for issuing national digital currency, Hawkesby said it is essential to consider all customers' needs in the economy. He maintained that cash had its benefits, just like the peer-to-peer payments.
We encourage every banking sector participant to consider their role in supporting the needs of their customers, including those who depend on cash for their everyday needs.
According to the assistant governor, the future of money will be a subject of concern for many central banks around the world. Currently, the Reserve Bank is concentrating on making sure that cash works for the people who prefer it. However, Mr. Hawkesby ascertained that the central bank "remains open-minded about how the technology of money and payments will continue to evolve."
The Reserve Bank of New Zealand, alongside other central banks worldwide, is diving into research for retail CBDCs. Nonetheless, Hawkesby clarified that there were "no imminent plans" to issue a CBDC. He added that the Reserve Bank is "well-connected and considering these developments very closely.
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