NZ central bank signals willingness to join CBDC race

Advisor to the Governor of the Reserve Bank of New Zealand, Christian Hawkesby, said regulators are conducting in-depth research into central bank digital currencies (CBDCs). This follows from the transcript of his remarks.

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According to Hawkesby, who also heads the central bank’s economics, financial markets and banking department, the regulator has not committed to issuing a digital New Zealand dollar.

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The official noted that rising global interest in CBDCs is driven by a decline in the use of cash as a means of payment and a reduction in its circulation. The COVID-19 pandemic, in his view, interrupted but did not reverse this trend.

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“Today banknotes form only 7-9% of money in circulation,” Hawkesby explained.

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The adviser emphasised the need for the central bank to see the evolution of money and “to remain open.” He also recalled the 2017 initiative to digitise the banking sector.

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Hawkesby noted that the central bank is among the 80% of regulators worldwide that actively research aspects of issuing and using CBDCs.

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Recall, the Bank for International Settlements and seven central banks presented foundational principles and key characteristics of CBDCs.

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Recently, Spain’s central bank also stated its desire to play an active role in these studies.

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The head of the Swedish central bank urged Parliament to grant the developing digital krona the status of a means of payment.

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China remains the leader in the race of national digital currencies. In the PRC, they intend to outpace other countries and be first to issue a CBDC, including to displace the dollar on the world stage. The head of the Federal Reserve, Jerome Powell emphasized, that for the United States it matters not to beat others to issuing a digital currency, but to do it right.

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Monetary authorities in Australia, neighboring to New Zealand, in September expressed skepticism about CBDCs.

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How and why central banks are creating digital currencies (CBDCs)

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