Thomas Daniels
New Zealanders Show Lukewarm Reception to Proposed CBDC
New Zealand’s Reserve Bank (RBNZ) has revealed muted public interest in its proposed central bank digital currency (CBDC). According to a December 10 report summarizing feedback from its public consultation, 70% of respondents viewed the initiative, referred to as “digital cash,” as unnecessary.
The consultation, which ran from April 17 to July 26, 2024, amassed 500 written submissions and 18,000 survey responses. Despite the RBNZ’s rationale that a CBDC could ensure access to central bank money in digital form and foster competition and innovation in New Zealand’s digital economy, only 16% of participants supported this perspective.
Privacy and Security Concerns Dominate Feedback
Concerns over privacy and government control emerged as the most significant barriers to public acceptance. A staggering 90% of respondents expressed apprehension about increased traceability and reduced financial privacy under a CBDC system. Many feared the potential evolution of such technology into a tool for monitoring or controlling individual financial behaviors.
Additionally, 65% of participants dismissed proposed features like automated payments and real-time balance tracking, indicating skepticism about their practical value.
Crypto Assets and Stablecoins: A Preferred Alternative?
The consultation also revealed a limited perception of cryptocurrencies such as Bitcoin and Ethereum as a threat to the New Zealand dollar. Many respondents highlighted the advantages of crypto assets, including their decentralized nature and fixed supply. Stablecoins were cited as a more appealing alternative to direct central bank money access, though RBNZ Governor Adrian Orr refuted their viability, calling them inherently unstable.
RBNZ’s Response and Future Direction
In response to these concerns, the RBNZ plans to prioritize research into privacy and user autonomy. “These issues will form the backbone of our end-user strategy,” the bank stated, promising a mix of legislative, cultural, and technological safeguards to address privacy fears.
The RBNZ also reiterated that digital cash would coexist with physical currency and function independently of commercial bank accounts, relying instead on digital wallets or mobile apps. Offline capabilities, such as Bluetooth-enabled transactions, are also being explored.
RBNZ Director Ian Woolford reassured the public that the bank “will not control or see how you spend your money,” underscoring the institution’s commitment to transparency and public trust.
