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The Assitant Governor of New Zealand’s central bank said that they will continue researching their CBDC in tune with global developments but haven’t been much keen on introducing it now in the country’s monetary system.
The CBDC mania is catching up with governments and central banks across the globe. On Monday, October 19, the Reserve Bank of New Zealand released a report clarifying its stand on a national CBDC.
Christian Hawkesby, the Assistant Governor of New Zeland’s central bank said that they are currently researching CBDC. He also adds that the central bank remains open to new technological developments in the payments sector. However, they don’t have any “immediate plans” to launch the CBDC in near future. But they would also have a close watch on global developments around CBDCs. The Assistant Governor added:
“Central banks around the world, including us, are researching retail central bank digital currencies (CBDC). Although we have no imminent plans to issue a CBDC, we are well-connected and considering these developments very closely. We are however following developments very carefully and are among 80 percent of the Central banks that are,banks that are actively researching CBDCs”.
Hawkesby further summarized the latest findings by the Bank of International Settlements (BIS) about countries working on their CBDCs. Firstly, CBDCs rely on a faster, cheaper, and more efficient infrastructure connecting global finance. On the other hand, it greatly helps to reduce dependency on physical cash that leaves too many people outside the global financial system.
Specifically talking about New Zealand, Hawkesby said that the access to cash was on a decline in the country. He also acknowledged the local banks for their contribution in helping its customers adopt digital payments. Hawkesby said:
“Today, the vast majority of New Zealand’s money balances are digitally represented, and banknotes make up just seven to nine percent of liquid money”.
CBDC Landscape Worldwide
While a few nations like China have accelerated its CBDC development, not all are moving in the same direction. The immediate neighbor of New Zealand, Australia, recently shared its stand on CBDC. It added that the country already has a robust digital payments infrastructure in place and doesn’t need to accommodate a CBDC.
Just yesterday, the U.S. Federal Reserve Chairman Jerome Powell said that they haven’t made a decision yet on issuing the Digital Dollar. Speaking at the panel hosted by the International Monetary Fund (IMF), Jerome Powell said:
“It’s more important for the United States to get it right than to be first. We are committed to carefully and thoughtfully evaluating the potential costs and benefits of a central bank digital currency for the U.S. economy and payments system. We have not made a decision to issue a CBDC. There are a number of ways that a CBDC might improve the payments system, and it is mainly this area that motivates our interest”.
Coming to Europe, the European Central Bank (ECB) is shifting gears to bring a pan-Europe digital currency. The ECB recently applied for the “Digital Europe” trademark which still remains in the research or the ideation phase. On the other hand, the U.K. has also been exploring and researching the Digital Pound.
CBDCs have certainly piqued the interest of central banks due to the technological benefits it brings to the market. However, very few central banks are willing to rush and bring their CBDCs to the market.