New Zealand’s Central Bank Is Actively Researching CBDC’s, But Has No Plans to Launch Soon
The Central Bank of New Zealand has hinted through its deputy governor that it is actively researching Central Bank Digital Currencies (CBDC). However, there are no plans to launch one anytime soon. This Southwestern Pacific Ocean island is the latest jurisdiction to announce a keen interest in the space as talks gain momentum. Recent weeks have seen significant developments with the Bank of International Settlements (BIS) releasing a CBDC report in collaboration with 7 major central banks.
New Zealand’s Central Bank assistant governor, Christian Hawkesby, spoke at the Royal Numismatic Society of New Zealand on Monday, where he confirmed the CBDC sentiments. According to Hawkesby, New Zealand’s monetary authority falls amongst the 80% of central banks that are currently looking into the possibility of their own CBDC,
“To be clear, we have no immediate plans to launch a CBDC in New Zealand.
We are, however, following developments very carefully and are among 80 percent of the Central banks that are, banks that are actively researching CBDCs.”
This is not the first time New Zealand has taken an interest in CBDC development; the country had published a bulletin back in 2018, highlighting the advantages and disadvantages of issuing a CBDC. The latest sentiments by Hawkesby have now solidified this position, with the assistant governor noting that CBDC's could be beneficial in multiple ways, including financial inclusion.
In his speech, Hawkesby was also keen to highlight the cash and digital currency dynamics currently dominating New Zealand’s financial ecosystem. He noted that the larger part of New Zealand’s currency in circulation is held in digital form, with only 7-9% being banknotes. This being the trend, the country’s central bank might be looking to increase its efficiency based on a CBDC, according to Hawkesby.
New Zealand’s position on a CBDC is similar to that of its neighboring Australia, which recently signaled a ‘no rush’ attitude but a keen interest in CBDCs. China remains ahead of the game, having piloted the digital yuan back in Q2; it has since been scaled to major cities as Chinese authorities look to integrate it with the country’s monetary ecosystem. Other countries set to launch a digital pilot for their CBDCs include South Korea and Japan, both of which have scheduled the release dates for 2021. Among others include Bahamas, Canada, Estonia, Russia, the US, and the ECB.