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New Zealand's Central Bank Kickstarts Public Consultation for Digital Dollar Initiative

Algoine News
Summary:
The Reserve Bank of New Zealand (RBNZ) has initiated a 101-day public consultation on the principles and designs for a potential digital dollar. The central bank is currently in the second stage of its four-stage approach to issuing a Central Bank Digital Currency (CBDC), aiming for a domestic digital dollar by 2023. The consultation, closing on July 26, addresses declining cash usage and strategies for a national CBDC. Simultaneously, RBNZ is preparing an alternate format for its digital cash discussion expected by late May. Meanwhile, Andrew Bayly, the Minister of Commerce and Consumer Affairs, has expressed concern about New Zealand's slow adoption of digital assets and blockchain technology.
New Zealand's Central Bank, also known as the Reserve Bank of New Zealand (RBNZ), has embarked on a 101-day public engagement to gather thoughts and suggestions on the structure and guidelines it has prepared for the country's potential digital currency. Future exchanges will revolve around the issuance of a digital currency regulated by the central bank (CBDC). Review of the process and moving towards the deployment of a domestically-issued digital currency by 2023, are among RBNZ's four-stage plans for CBDC implementation. As part of its digital currency venture, the central bank is currently navigating stage two, which revolves around considering potential design concepts for digital cash, and the associated advisory and budgeting aspects. On April 17, they made public a consultation document with the aim of shaping the path forward in terms of judging the suitability of digital cash in New Zealand's financial ecosystem. The last day for submissions is July 26. This document showcases the merits of CBDC adoption and highlights the significance of staying in sync with other global central banks, amidst dwindling cash transactions. Encapsulating this, they stated, “For a sizable number of people, cash is no longer a primary method of payment. Daily cash usage by New Zealanders is constantly decreasing.” The publication presents 12 questions that discuss four main areas: views on New Zealand's CBDC, the advantages of digital cash, its strategic design, and supervised release. As per RBNZ, introducing a CBDC backed by a sturdy infrastructural network could catalyze innovation in the country's payments sector. Simultaneously, the RBNZ is working to formulate alternative editions of its digital cash consultation document, due for release in late May. The country's Minister of Commerce and Consumer Affairs, Andrew Bayly, recently conveyed his apprehension about New Zealand's unprogressive attitude regarding the exploration and embracing of digital asset and blockchain technology advancements. In response to concerns raised by the parliamentary Finance and Expenditure Committee about cryptocurrencies, Bayly’s office remarked:“By adopting a 'wait and see' approach, we run the risk of New Zealand losing out on the merits of advancements in the digital asset sector.” Eight primary proposals were put forward by the ministry's consultants for New Zealand to ride the global crypto wave again. This includes the introduction of policies and regulations to foster developments in digital assets and blockchain, and promoting better cooperation between governmental and industry participants among others.

Published At

4/17/2024 2:31:42 PM

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