New Zealand’s CBDC consultation results show limited public enthusiasm

New Zealanders are not too excited about a central bank digital currency, with the Reserve Bank of New Zealand’s public consultation feedback revealing the majority view it as not important.

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

More than 70% of the respondents were of the opinion that a CBDC, which the bank refers to as “digital cash,” was not important. Further, only 16% agreed with the RBNZ’s rationale for introducing a CBDC to ensure access to central bank money in digital form and promote innovation and competition in New Zealand’s digital economy.

Most participants raised concerns about security, privacy, and whether such a system was even necessary, while 65% indicated no interest in proposed features like automated payments and real-time balance tracking.

90% of respondents flagged potential government control as their main concern, linking the idea of a CBDC to increased traceability and reduced privacy. Some worry that, even if not initially intended for intrusive purposes, a CBDC could evolve into a tool for monitoring or controlling financial behavior.

Respondents were also largely unconcerned about the impact of crypto assets like Bitcoin and Ethereum on the use and popularity of the New Zealand dollar. Many viewed cryptocurrencies as offering various advantages like fixed supply and the absence of centralized control.

Meanwhile, some saw stablecoins as a viable alternative ‘while questioning the need for direct access to central bank money,’ a perspective firmly countered by RBNZ Governor Adrian Orr, who views them as inherently unstable and not a viable replacement for traditional currency.

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

“These issues will form the backbone of our end-user strategy […] We intend to look at a wide range of instruments to protect privacy and autonomy, such as legislative, cultural, or technological means,” it added.

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

According to the central bank, digital cash would coexist with physical cash, functioning without a commercial bank account by using a digital wallet, payment card, or mobile app while also supporting offline transactions via Bluetooth.