Geoff Bascand, the Deputy Governor and Head of Operations at the Reserve Bank of New Zealand, recently delivered a speech at The Point Conference, hosted by Payments New Zealand, Auckland. Below are key takeaways from the official publication.
- Crypto-currencies, and the blockchain technology they rely on, are bringing about more far-reaching changes in the payments system and the way we view money.
- The Reserve Bank has a strong record of innovation and welcomes technological progress. However, when considering digital currencies, it should be remembered that riches did not come easily during the gold rush, and they will not come easily now.
- Issuing a central bank digital currency would ensure public access to legal tender money regardless of the presence of cash.
- A central bank issued, conventional digital currency could improve settlement speed and transaction fees compared to existing payments.
- One of the most important contributions of a central bank to prosperity is its responsibility for financial stability.
- A breakdown in the financial system can cause enormous economic and social harm. We could not issue a digital currency if it might undermine financial stability.
- A central bank digital currency could reduce commercial bank resiliency to economic downturns.
- It is too early to determine whether a digital currency should be issued.
- Central banks and researchers are still probing these technologies and currencies. But we will continue to explore digital currencies; for our benefit and for the benefit of New Zealand’s financial system.
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