New Zealand’s CBDC consultation results show limited public enthusiasm

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As a seasoned researcher with extensive experience in the field of central banking and digital currencies, I must admit that the response from New Zealanders to the prospect of a Central Bank Digital Currency (CBDC) has been quite intriguing. The majority viewpoint, that CBDC is not important, seems to be a common theme across many societies, but it’s particularly striking in New Zealand given its tech-savvy population.

It appears that New Zealanders are showing a lack of enthusiasm for a central bank digital currency, as indicated by the Reserve Bank of New Zealand’s public consultation results, which suggest that the majority consider it as unimportant.

On December 10th, the Reserve Bank of New Zealand (RBNZ) unveiled the findings from a public discussion regarding the possibility of a Central Bank Digital Currency (CBDC). This open dialogue received input from 500 written submissions and 18,000 survey responses.

Over 70% of those surveyed considered digital cash (CBDC) as unimportant, while just 16% supported the Reserve Bank of New Zealand’s reasoning for implementing a CBDC: to provide digital access to central bank money and encourage innovation and competition within New Zealand’s digital economy.

A majority of the attendees expressed apprehensions regarding security, privacy, and the need for the system itself, with around two out of three participants showing no enthusiasm for suggested functions such as automatic transactions and instant balance monitoring.

Approximately 9 out of 10 participants expressed their primary apprehension about the prospect of government oversight, connecting the notion of Central Bank Digital Currencies (CBDCs) with heightened transparency and potential encroachment on privacy. There are concerns that while a CBDC might not be designed for intrusive purposes at its inception, it could eventually morph into a means for surveillance or control over financial activities.

Participants generally showed little worry regarding how digital currencies such as Bitcoin and Ethereum might affect the usage and prestige of the New Zealand dollar. Instead, they perceived cryptocurrencies as boasting several benefits, including a limited supply and lack of centralized management.

While some view stablecoins as a potential substitute, others are unsure about the necessity of having immediate access to central bank funds. However, this view is strongly opposed by Reserve Bank of New Zealand Governor Adrian Orr, who considers them fundamentally unstable and inadequate as an alternative to traditional currency.

In response to these issues, the Reserve Bank intends to prioritize its research efforts on matters related to privacy and self-determination.

Our user-focused approach will be built upon these key concerns… We plan to examine various methods for safeguarding privacy and self-determination, including laws, societal norms, and technology.

On April 17, 2024, the Reserve Bank of New Zealand (RBNZ) initiated a discussion on the potential future of digital currency, which continued until July 26. During this period, RBNZ Director Ian Woolford emphasized that the central bank has no intention to oversee or monitor how individuals spend their money.

As stated by the central bank, digital money will operate alongside traditional cash. This digital currency can be used without needing a bank account through devices like digital wallets, payment cards, or smartphone apps. Additionally, it allows for offline transactions using Bluetooth technology.

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2024-12-10 12:48