Financial authorities in New Zealand are in no hurry to issue a central bank digital currency, or CBDC, according to a central bank executive.
Christian Hawkesby, assistant governor at the Reserve Bank of New Zealand, claimed that the country has “no imminent plans” to issue a CBDC.
In a speech on Oct. 19, Hawkesby said that the bank remains open-minded about further progress in money and payment technologies and has actively engaged in CBDC research. He said:
“To issue currency that meets the needs of the public, we must take a new and holistic approach. We acknowledge there is much work to be done. We do not yet have all the answers, nor do we expect to find them alone. However, by working together with New Zealand we want to be ‘on the money’ now and in the future.”
The RBNZ’s assistant governor also highlighted a wide number of benefits of cash, claiming that they “have so far been not well replicated by electronic money.” According to Hawkesby, those benefits include legal tender money, instant “in-person” settlement, emergency offline backup payments, as well as privacy and autonomy in savings and payments.
Hawkesby’s statement echoes recent claims by the United States’ Federal Reserve chairman, Jerome Powell. On Oct. 19, Powell said that the U.S. will not be issuing a digital dollar until the Fed answers all questions around a potential CBDC including user privacy and security. “CBDC is one of those issues where it’s more important for the United States to get it right than it is to be first,” Powell claimed, emphasizing that there is still a strong demand for cash in the country.
Hawkesby also stressed that, despite the decline in its transactional use, cash circulation in the country continues to increase. “This is likely due to its usefulness to some as a store of value,” he stated.