10 December 2024 – Kiwis say cash is crucial and current payment options are not delivering what customers want according to the Reserve Bank’s Digital Cash consultation.
Our consultation attracted the highest response we’ve ever received. More than 500 individuals and groups have made their voices heard via written submissions and over 18,000 responded to our online survey.
The Reserve Bank of New Zealand – Te Pūtea Matua, is concerned about the limited choices New Zealanders have to pay, and the lack of competition and innovation in our money and payments markets. The proposal to make cash available in a digital format is so people can get the combined benefits of both cash and digital payments in one product that is fast, direct, offline and secure.
Director of Money and Cash Ian Woolford says 134 countries representing 98% of global GDP, including key trading partners, are exploring digital currency.
“Money issued by central banks can play a crucial role in underpinning a reliable, efficient, competitive, innovative and inclusive financial system. We’re exploring Digital Cash to ensure future generations of New Zealanders experience these benefits.”
The Reserve Bank is committed to ensuring New Zealanders can continue to access, use, and bank cash as they need or prefer. This consultation reinforced that cash is crucial for Kiwis.
“84% of respondents were worried about losing access to banknotes and coins (physical cash) and want assurance that cash will still be issued by the Reserve Bank and not reduced or replaced by Digital Cash,” he says.
“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.”
Privacy and control were big concerns for survey respondents and the Reserve Bank respects and agrees with this. “Digital Cash will be designed to be private,” Mr Woolford says.
“The Reserve Bank doesn’t care if you spend your money – physical or digital – on meat pies and lattes but does care if it is used to fund terrorism, for organised crime or money laundering.”
“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. People wanted features like the ability to make offline payments in an emergency (63%), real-time payments (60%), and it be free to use (60%).”
“We have more work to do. Businesses, fintechs, financial service providers, and others like charities were supportive of our reasons to explore Digital Cash but some of these sentiments weren’t shared by members of the public responding to the survey.”
Digital Cash could help disabled communities and for the first time, RBNZ produced consultation documents in five alternate formats – NZ Sign Language, braille, audio, easy read and large print. These communities told us current payment methods are challenging, expensive and biased against disabled people. For example, many disabled people use contactless payments and get hit with higher fees so making Digital Cash inclusive and accessible is a priority for us.
The Digital Cash proposal is a multi-year exploration and there will be further opportunities for public input. The next stages include further engagement, design and technical work, policy development and a cost-benefit analysis during 2025 and 2026. Ultimately, the Reserve Bank of New Zealand will work with the Government to decide whether to introduce Digital Cash or not. The earliest it would be introduced is 2030.
More information
Overview of Digital Cash consultation, submissions and response with video: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=2dc1dc1f30&e=f3c68946f8
Summary report on Digital Cash submissions and response (PDF, 611 KB): https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=ad506e847f&e=f3c68946f8
Read all the submissions on the CitizenSpace website: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=406a2075a9&e=f3c68946f8
Digital cash: Your questions answered: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=ea78596b95&e=f3c68946f8
