The Reserve Bank has highlighted a gap in the adoption of digital cash options in the country compared to more developed economies.
The RBNZ stated that the limited competition within New Zealand’s banking sector is hindering consumer access to innovative digital cash solutions. Unlike other countries where advancements in secure and offline-accessible digital cash are being made, New Zealand consumers are missing out on these developments.
The Reserve Bank’s recent consultation on digital cash has received public engagement, garnering over 500 written submissions from individuals and organisations, along with more than 18,000 responses to an online survey.
To address some of the concerns raised during the consultation, the RBNZ is proposing to unify cash and payments into a single digital format.
Ian Woolford, the RBNZ director of money and cash, noted that 134 countries, accounting for 98% of the global economy, are currently exploring digital currencies, including key trading partners.
“We’re exploring digital cash to ensure future generations of New Zealanders experience these benefits.”
Woolford also mentioned that the consultation puts emphasis on the ongoing importance of physical cash, with 84% of respondents expressing concerns about losing access to banknotes and coins. They seek reassurance that the Reserve Bank will continue to issue cash and that it will not be diminished or replaced by digital currency.
“We’ll keep issuing cash for as long as New Zealanders want to use it.”
“We’re doing a lot of work to redesign the cash system, including helping retailers through community cash services trials next year in several rural communities lacking over-the-counter bank or ATM services.”
Woolford said that privacy and control were the primary concerns highlighted during the consultation, with speed also being a significant issue.
“People also told us they want fast, direct, offline, and secure ways to pay with low fees, but today they only have these choices with banknotes and coins.”
63% said they wanted the ability to make offline payments in an emergency, real-time payments (60%) and for cash to be free to use (60%).
Woolford said the next steps would involve additional engagement, design and technical work, policy development, and a cost-benefit analysis throughout next year and 2026.
The decision on the introduction of digital cash is expected by 2030.