Innovation will be key to building a sustainable future for money and the cash system.
In a speech to a conference of Angel Investors in Wellington today, Reserve Bank Governor Adrian Orr said the future of money and cash was at a “crossroad” and innovation was necessary to build a sustainable future.
“We must decide how best to use of digital technology to modernise central bank money, while we continue to ensure cash remains an option for those who need it,” he said.
While no decisions had yet been made, he said work was underway to design a Central Bank Digital Currency (CBDC).
He said it would take into account the public’s feedback received during recent consultation. and will be a multi-stage and multi-year effort.
“At a basic hygiene level, a CBDC must be user-friendly, resilient to cyber and other operational risks, and enable privacy,” he said, noting the importance the public placed on privacy of their money.
“The emphasis we place on privacy reflects the fact that the CBDC design will be driven by broad community, rather than specific commercial, interests.”
He said the CBDC would provide a platform for economic and financial innovation, including competition in the payments and settlement sector, cross-border transfers, and financial inclusion and capability building tools.
Consultation on the issues paper, Future of Money – Cash System Redesign (Te Moni Anamata – He Whakahou i te Pūnaha Moni closes on 7 March, with about 190 submissions received so far.