New Zealand Sets Sights on Digital Dollar Launch by 2030

New Zealand Sets Sights on Digital Dollar Launch by 2030

BlockchainRegulation

By Jakub Lazurek

18 Apr 2024 (3 months ago)

2 min read

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New Zealand's Reserve Bank launches consultation for a digital dollar, eyeing a 2030 release

On April 17, the Reserve Bank of New Zealand initiated a new phase in exploring a central bank digital currency (CBDC), targeting a rollout by 2030.

This phase involves public feedback to refine the CBDC's design, which mirrors the value of the physical New Zealand dollar (NZD).

The digital NZD would enable easy swaps between digital and physical cash and bank deposits.

Managed by the Reserve Bank, it wouldn't be issued directly to the public but through private banks and payment providers, integrating into the existing financial infrastructure while ensuring stability.

Privacy and security are highlighted as foundational elements of the CBDC, with the Reserve Bank committing not to monitor individual spending.

The design aims to be a secure alternative to traditional banking, enhancing user trust and protecting privacy.

A significant aim of the digital dollar is to expand financial access, particularly for those without bank accounts.

It promises easy access and can operate offline via Bluetooth, crucial during outages.

While maintaining certain oversight, identity verifications and compliance checks will be managed by private entities, not by the Reserve Bank itself.

The CBDC is considered a more secure option than cryptocurrencies and stablecoins, posing fewer risks to the nation’s economic stability.

It will support smart contracts, allowing for automated and conditional payments, which could benefit local businesses by securing transactions.

This consultation period ends on July 26, leading to a more detailed design phase, including cost analysis through 2026.

If followed by prototype development in 2028-2029, the CBDC could launch in 2030. This timeline shows New Zealand’s careful approach to adopting digital currency technologies.

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