The citizens of New Zealand have expressed their strong disinterest in a central bank digital currency (CBDC).
The citizens of New Zealand have expressed their disinterest in a central bank digital currency (CBDC). This sentiment was revealed following the Reserve Bank of New Zealand (RBNZ) public consultation, which indicated that most New Zealanders view CBDC as unimportant.
The consultation received the highest-ever response, with 500 written submissions and extensive discussions with stakeholders. Additionally, over 18,000 responses were gathered through an online public survey, three times more than the responses received in the 2021 consultation.
According to the survey report, more than 70% of New Zealand citizens consider having cash in digital form unimportant. Furthermore, over 80% expressed concerns about losing access to traditional cash for their transactions. The report also noted that only 16% supported the Reserve Bank of New Zealand’s rationale for introducing CBDC.
A core concern among New Zealanders regarding digital cash is the potential for government control. Many fear it could lead to traceability by authorities and reduced privacy. They worry that, even if privacy intrusion is not the initial intention, it could eventually become so. These concerns stem from broader skepticism toward public institutions, influenced by experiences during the COVID-19 pandemic or events in other countries. RBNZ wrote:
“The main concern about Digital Cash for New Zealanders (90%) was the potential for government control. Respondents were clearly concerned about the implications of Digital Cash for traceability, and by extension privacy and autonomy. Many feared Digital Cash will be used to facilitate unacceptable intrusion into their privacy or social control, even if it is not originally designed to do so.”
Stakeholders in the fintech and crypto-asset sectors, however, were more supportive of a digital cash system. Many stated the advantages of crypto-assets like Bitcoin, which have fixed supplies and resistance to central authority control. Others pointed to stablecoins as a viable option, offering stability without requiring direct access to central bank-issued money.
The RBNZ noted it is working to ensure smooth transitions between digital and physical cash. This includes developing systems that allow easy and affordable conversions, making the CBDC compatible with existing cash frameworks. RBNZ stated:
“we are working on ways to make sure Digital Cash can integrate seamlessly with physical cash, including for example, how to enable easy and low- or no-cost conversions of Digital Cash to cash, and vice versa.”
RBNZ further stated that the feedback from this consultation will guide the next steps and the proposal for Digital Cash, with plans to present a business case to the government by 2026.
Furthermore, it noted that the issues identified in the survey will shape the end-user strategy, moving from concepts to practical solutions. The focus will be on protecting privacy and autonomy through legislative, cultural, and technological tools.
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Temitope is a writer with more than four years of experience writing across various niches. He has a special interest in the fintech and blockchain spaces and enjoy writing articles in those areas. He holds bachelor's and master's degrees in linguistics. When not writing, he trades forex and plays video games.
