New Zealand’s CBDC consultation results show limited public enthusiasm

New Zealanders aren’t too excited about central bank digital currency; The Reserve Bank of New Zealand’s public consultation feedback reveals that the majority do not think this is important.

On December 10, the Reserve Bank of New Zealand (RBNZ) announced the results of its public consultation on a potential CBDC, which received feedback from 500 written submissions and 18,000 survey responses.

More than 70 percent of those surveyed believe that CBDC, which the bank calls “digital cash,” is not important. What’s more, only 16% agreed with the RBNZ’s rationale for introducing a CBDC to enable access to central bank money in digital form and encourage innovation and competition in New Zealand’s digital economy.

While most respondents expressed concerns about security, privacy, and whether such a system is necessary, 65% said they were not interested in proposed features such as automatic payments and real-time balance tracking.

90 percent of those surveyed linked the idea of ​​CBDC to increased traceability and reduced privacy, marking potential government control as their main concern. Some worry that CBDC could turn into a tool for monitoring or controlling financial behavior, even if it was not originally designed for intrusive purposes.

Respondents are also largely unconcerned about the impact of crypto assets such as Bitcoin and Ethereum on the use and popularity of the New Zealand dollar. Many feel that cryptocurrencies offer several advantages, such as fixed supply and lack of central control.

Meanwhile, some saw stablecoins as a viable alternative while “questioning the need for direct access to central bank money”; this view was firmly opposed by RBNZ Governor Adrian Orr, who viewed them as inherently unstable and unable to replace traditional currency.

To address these concerns, the Central Bank plans to focus its research agenda on privacy and autonomy.

“These issues will form the backbone of our end-user strategy […] “We plan to consider a wide range of tools to protect privacy and autonomy, such as legal, cultural or technological tools,” he added.

The RBNZ launched its consultation on 17 April 2024, which will run until 26 July, to explore the future of digital money. At the time, RBNZ Governor Ian Woolford assured that the central bank “will not control or see how you spend your money”.

According to the central bank, digital cash will coexist with physical cash, can work without a business bank account using a digital wallet, payment card or mobile app, and will also support offline transactions via Bluetooth.