The Reserve Bank of New Zealand says a central bank digital currency could be a “solution” to ongoing reductions in cash use, and that it will look more closely into the use of cryptocurrencies.

The bank will open public consultations on CBDCs and the emergence of new forms of digital currency, including stablecoins.

We will be fully advising on important future payment and saving issues for New Zealanders for the remainder of 2021, powered by our new regulatory mandate for cash and a broader monetary system https://t.co/vniv2aULCZ #rbnz pic.twitter.com/OHdsuIhpGd

– The Reserve Bank of New Zealand (@ReserveBankofNZ) July 7, 2021

In a July 7 announcement, the Reserve Bank announced that it would issue a series of “Currency and Cash Papers in Response August-November” based on consultations on the “Future of Cash” since 2019.

The bank will “recommend and seek feedback on crypto-centric items,” exploring the potential for a CBDC that “works alongside cash as government-backed money,” along with unspecified issues arising from innovations in monetary and financial management Payment technology, including cryptocurrencies, yields such as bitcoin and stablecoins.

The Reserve Bank of NZ is open to the implementation of the CBDC but has emphasized the need for a measured and cautious approach.

Deputy Governor Christian Hawkesby said in October 2020 that the bank has “no immediate plans” to implement a CBDC, noting that “in order to issue currency that meets public demand, we need to take a new and holistic approach. We admit that there is still more to be done. “

In the recent announcement on CBDCs, Hawkesby noted the following:

“For New Zealand, we want to explore the potential of a central bank digital currency to address some of the disadvantages of reducing physical cash and services.”

“CBDC, like digital cash, could also be part of the solution, but we need to review our assessment of the problems and suggested approaches before developing proposals. Which company, ”he added.

The Deputy Governor said that despite the decline in the number of New Zealanders using cash, it is “valued for ensuring inclusion” and giving citizens “autonomy and choice to pay and save”.

“Individual and retail customers are struggling with the loss of cash and direct banking services despite efforts by banks to help them adapt,” he added.

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However, Hawkesby notes that digital payments are the preferred option for the majority of New Zealanders and that “the job of the bank is to make sure these transitions work for all New Zealanders”:

“We also know that digital payment is the preferred payment method for most of us and we are certain that there will be less cash in the future.”