New Zealanders Remain Skeptical About Central Bank Digital Currency
Despite the Reserve Bank of New Zealand’s efforts to gather public feedback on a potential central bank digital currency (CBDC), the majority of respondents do not see it as a priority.
The recent public consultation conducted by the Reserve Bank of New Zealand (RBNZ) revealed that over 70% of participants do not consider a CBDC, referred to as “digital cash” by the bank, to be important. Out of 500 written submissions and 18,000 survey responses, only 16% agreed with the RBNZ’s reasoning for exploring a CBDC, which included ensuring access to central bank money in digital form and fostering innovation and competition in the digital economy of New Zealand.
Concerns raised by respondents revolved around issues of security, privacy, and the necessity of a CBDC system. In fact, 65% of participants showed no interest in proposed features such as automated payments and real-time balance tracking.
The primary worry among 90% of respondents was the potential government control associated with a CBDC, fearing increased traceability and reduced privacy. There are concerns that a CBDC could be used for monitoring or influencing financial behavior, even if not originally intended for such purposes.
Interestingly, respondents were largely unconcerned about the impact of cryptocurrencies like Bitcoin and Ethereum on the New Zealand dollar. Many saw cryptocurrencies as advantageous due to factors such as fixed supply and decentralization.
While some viewed stablecoins as a viable alternative to a CBDC, RBNZ Governor Adrian Orr dismissed them as unstable and not a suitable replacement for traditional currency. To address these concerns, the Reserve Bank plans to focus its research on privacy and autonomy measures.
“These issues will be central to our strategy moving forward. We will explore various methods, including legislative, cultural, and technological approaches, to protect privacy and autonomy,” the bank stated.
The consultation on digital cash began on April 17, 2024, and concluded on July 26. RBNZ Director Ian Woolford reassured the public that the central bank would not monitor or control individuals’ spending habits. Digital cash would coexist with physical currency and allow for transactions without the need for a commercial bank account, utilizing digital wallets, payment cards, or mobile apps, and supporting offline transactions through Bluetooth technology.