The Assistant Governor at the Reserve Bank of New Zealand, Christian Hawkesby, discussed the bank’s approach towards CBDCs.
Hawkesby revealed the bank was actively exploring central bank digital currencies (CBDCs). While he stated that the bank would “remain open-minded,” he noted that the bank had no plans to launch a CBDC in the near future.
Christian Hawkesby’s speech
In a speech delivered to The Royal Numismatic Society of New Zealand, the Assistant Governor at the Reserve Bank of New Zealand (RBNZ) shed light on the country’s approach towards central bank digital currencies.
Christian Hawkesby, who is also the General Manager of the Economics, Financial Markets, and Banking at RBNZ, started his speech discussing the nation’s economic history, the role of cash during the COVID pandemic, and trends in digital currency.
Hawkesby then discussed the decline in demand for physical cash as most of the people’s funds is “digitally represented.” He revealed that the banknotes account for only seven to nine percent of liquid funds.
Regardless, cash does have its benefits, such as peer-to-peer payments. This sentiment was reinforced by statistics showing the increased demand for cash during the pandemic.
However, Hawkesby noted the need to think about the future of money and stated that the bank would remain open-minded.
New Zealand explores CBDCs
While New Zealand currently has no plans to launch a CBDC, the nation’s central bank is actively researching them. Hawkesby noted that banks across the world are researching digital currencies and while New Zealand is not looking to launch one, it is well connected regarding these developments. He further added that local banks were assisting customers in the transition to digital payments during the COVID pandemic.
Meanwhile, US Federal Reserve Chairman Jerome Powell revealed that while the Fed is researching CBDCs, it has not yet decided to launch its own digital currency. On the other hand, China is moving forward with the development of its Digital and has recently conducted a successful lottery.
