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Following the publication of two independent discussion papers on a digital dollar for New Zealand, the central bank has requested public input on a potential central bank digital currency (CBDC).

The two papers, titled “The Future of Money – Stewardship” and “The Future of Money – Central Bank Digital Currency,” set a December 6 deadline for public comment, following the reserve bank’s announcement earlier this year that it would begin negotiations about a potential CBDC.

Assistant Governor Christian Hawkesby of the Reserve Bank of New Zealand said the cash patterns found in the discussion papers could pave the way for more innovation in money and the wider New Zealand economy.

Hawkesby stated,

“Trends in cash use and availability along with digital innovation create opportunities to innovate. We believe these should be discussed widely and our consultations aim to encourage that.”

The central bank stated in the papers that it sees chances to broaden the reach of central bank money by introducing a central bank digital currency, which it believes will assist enhance financial inclusion and security.

The papers also cast doubt on stablecoins, citing concerns about their influence on financial stability and the central bank’s control over currency issuance in the New Zealand economy.

According to Hawkesby, a digital currency would allow cash to be used more freely in the digital world.

The advantages and benefits of cash would be experienced in the digital world with a central bank digital currency, which would work alongside cash and private money held in commercial bank accounts.

In November, a new policy document will be released that will look at ways to improve resilience and efficiency through a central bank digital currency.

It comes at a time when central banks throughout the world are becoming more interested in CBDCs.

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