The Reserve Bank of New Zealand published the results of a retail central bank digital currency (CBDC) survey that it launched in April. It received 500 detailed responses and 18,000 people took part in a public online survey. Ninety percent of people responding to the online survey had concerns that the government will use the CBDC to monitor or control their spending. While central banks view themselves as the most trustworthy issuers of money, more than 70% of the same group said they did not trust the Reserve Bank to issue digital cash. However, of those that took part in the full consultation, only 36% lack trust.
A more general question asked if the respondents agreed with the reasons for investigating digital cash. Only 16% agreed, with over 80% disagreeing. The reasons the central bank provided were:
- to ensure that central bank money is available to New Zealanders and allow it to be used digitally, and
- to enable a money and payments system that is innovative, competitive and contributes to the development of New Zealand’s digital economy.
One of the CBDC concerns worldwide and in New Zealand is that it could accelerate the decline of cash, whereas people want to make sure physical cash remains accessible.
Institutions want wholesale CBDC
The feedback provided by institutions was more anecdotal. The Reserve Bank said they were supportive, although quite a few mentioned a wholesale CBDC would be more preferable to retail. Banks believe that existing modernization efforts combined with tokenized deposits could address consumer needs. And they were worried that if a CBDC received a go ahead, it could affect the roll out of other modernization efforts.
The fintech and crypto-asset sectors were supportive of innovation and wholesale CBDC in particular, provided it was more accessible. Businesses were not keen on CBDC preferring to lean on market forces.
Meanwhile, in a hearing earlier this year, Reserve Bank Governor Adrian Orr made a joke during a parliamentary committee hearing. “It’s a great business to be in central banking. You print money and people believe it. Touch wood,” said Orr.
