New Zealand, July 8, 2021 /AlexaBlockchain/ – The Reserve Bank Of New Zealand, Te Pūtea Matua, has announced that it will do extensive public consultations on how the New Zealanders wish to pay and save in the future. The public consultation will include topics from cash payment to online payment to cryptocurrency, Bitcoin, Stablecoin and most importantly CBDC.
In a press release describing the future course of action of the Reserve Bank Of New Zealand, Assistant Governor Christian Hawkesby, said, “The Reserve Bank of New Zealand – Te Pūtea Matua will be consulting extensively over the remainder of 2021 on issues key to the future of how New Zealanders pay and save, driven by its new stewardship mandate for cash and a broader currency system that supports the prosperity and wellbeing of New Zealanders.”
The central bank said that it will be releasing a series of money and cash issues papers for feedback from August to November which are taking forward issues identified during Future of Cash consultations in 2019.
“We’ll be considering not only what we should be doing as steward, but what a resilient and stable cash and currency system in New Zealand might look like, and how we might best respond to digital innovations in money and payments,” says Mr Hawkesby who is also the Reserve Bank’s General Manager of Economics, Financial Markets and Banking.
“The first consultation will introduce and seek feedback on the broad concepts of money and cash stewardship, and outline specific topics to be covered in the rest of the series. Subsequent papers will look at the potential for a Central Bank Digital Currency (CBDC) to work alongside cash as government-backed money, issues arising from new electronic money forms including crypto assets (such as BitCoin) and stable coins (such as proposed by a Facebook-led consortium), and how the cash system might need to change to continue to meet the needs of users.
“While most of us are keen to pay electronically, we know from research we’ve published today, feedback, and news reports that some communities, personal and retail customers are struggling with the loss of cash and in-person banking services despite banks’ efforts to help them adapt.
“Despite less New Zealanders using physical cash, the ability to use it remains widely valued because it ensures inclusion, and gives everyone autonomy and choice in the way they pay and save.
“Knowing that the money held in our bank accounts can be withdrawn in central bank money backed by the New Zealand government – currently only available through physical cash – is an unspoken promise which helps promote trust in banks and the financial system. We are concerned that this promise is being weakened through reducing access to physical cash services due to falling branch and ATM numbers.
“However, we also know that digital forms of payment are the preferred way of paying for the majority of us, and that the future will undoubtedly involve less cash. Our job is to ensure that these transitions work for all New Zealanders.
“The potential for a Central Bank Digital Currency to help address some of the downsides of reducing physical cash use and services is something we want to explore for New Zealand. A CBDC, similar to digital cash, might well be part of the solution, but we need to test our assessment of the issues and proposed approach before developing any firm proposals.
“We encourage those affected or interested in these issues to register on our website to be included in these consultations, during which we’ll be talking and travelling widely to hear from all the interests involved including diverse communities and customer types, along with cash, banking and fintech industries,” says Mr Hawkesby.
Research reports highlight cash use and service changes, and how we value cash
The Reserve Bank has published today a series of research reports prepared over the past six months looking at trends in cash and payments preferences and services, including the apparent impact of COVID-19, and why and how New Zealanders still value cash despite preferring electronic payments.
Cash and payments data update: COVID-19 special
The COVID-19 pandemic has accelerated the decline in transactional cash use, compounded by accelerating reductions in banks’ branch and cash services, and despite New Zealanders’ rush to cash in March 2020.
Comparison report: Cash use surveys 2017, 2019, 2020
Cash use survey 2020
The decline in cash users is reflected across a number of indicators, including the proportion of people who don’t hold cash in their wallet, and the number of people who are using cash less than they were 12 months ago. Increasing numbers of New Zealanders are using electronic payment options. In 2020, the trajectory of change in responses to some questions has increased dramatically.