A consultation on digital currency was launched on Wednesday by the Reserve Bank of New Zealand.
In response to the consultation document, the public was requested to comment on the design of digital currency, whether interest should be paid, and whether holding limitations should be in place. A $2000 holding cap, comparable to the benchmark of the digital Euro, is being considered by the central bank.
Since cryptocurrencies have become more and more popular over the past few years, central banks all over the world have been considering the possibility of creating their own digital currencies, or central bank digital currencies, or CBDCs.
A digital currency might offer a “opportunity,” according to New Zealand, which began consulting on the future of money and CBDCs in 2021. Digital currency would facilitate more payment options, be simple to use, encourage innovation, and allow for the use of cutting-edge technologies like smart contracts, according to the 2024 consultation.
The consultation document stated, “By supporting new types of money and payments services from the private sector, digital cash could also boost competition in New Zealand’s payments landscape.” The private sector would disseminate the digital currency, and the people of New Zealand would get to pick and choose which services they utilise.
The consultation paper stated that the CBDC process in New Zealand is multi-year and multi-staged, and the country has not made a decision to issue one yet. It would be available around-the-clock, have a 1:1 trade value with actual currency, and be valued in New Zealand dollars. The deadline for consultations is July 26.