Countries have been working towards incorporating technological changes into the financial sector as the world traverses towards digitalization. While digital payment systems have already made their way into the global economic scene, Central Bank Digital Currencies [CBDC] is striving to enter the markets. As China has stepped up its game in developing CBDCs, several other countries are trying to catch up with it. However, New Zealand revealed that it was going at a slower pace, with regard to the development of its native CBDC.
New Zealand To Extensively Probe Development Of CBDC
Fearing China’s global take over in terms of CBDC development, many countries have been fastening the process. But, New Zealand seems to value a better understanding of CBDCs than a faster one. As per a recent speech by the Assistant Governor of the Reserve Bank of New Zealand, at The Royal Numismatic Society of New Zealand, Annual Conference, Wellington the bank will prolong its research on the development of CBDC as well as a state-issued digital currency.
The Assistant Governor, Christian Hawkesby said in his speech,
“[….] we have no immediate plans to launch a CBDC in New Zealand. We are,
however, following developments very carefully, and are among the 80 percent of central
banks that are actively researching CBDCs.”
The need to be ahead in the game of financial innovation is undoubtedly the concern of several countries. However, New Zealand revealed that it would tend to the immediate requirement of developing a CBDC as the “catalysts for researching CBDC depend on local needs.”
China has already jumped on to the testing stage of its CBDC the digital yuan. However, a recent report formulated by the Bank of International Settlements [BIS] along with a few Central Banks laid out the requirements of a CBDC as opposed to the issuance of these currencies.
While cryptocurrencies have proved to be a topic of interest for economically suppressed countries, the fate of CBDCs in such economies is rather uncertain. The Assistant Governor further added,
“Central banks in economies with declining use of, and access to, cash are considering
whether a CBDC could deliver an additional form of legal tender. For example, in Sweden,
the Riksbank is considering an e-krona as a digital complement to cash given the decline of
cash in circulation.”