New Zealand is considering a switch to digital currency



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New Zealand’s central bank is exploring the possibility of issuing a digital currency, saying the benefits it would bring include its potential use as a monetary policy tool.

The central bank cites “the decline in the use, acceptance and availability of cash in New Zealand, and emerging innovations in private money, also known as stablecoins.”

While developing a central bank digital currency would take a long time given the complexities and involve a multi-step approach, the Royal Bank of New Zealand (RBNZ) has said it broadly supports the idea.

A digital currency should support the New Zealand dollar “as a single unit of account” and be exchanged 1 for 1 for cash, he said, adding that “cash is there to stay as long as some of us need. “

The RBNZ said a digital currency would support the value anchor role of central bank money by:

* Provide individuals and businesses with the ability to convert private currency into a digital form of central bank money, ensuring long-term convertibility of private money into central bank money

* I am improving the technological form of central bank money to keep it relevant in a digital future

* Provide an additional monetary policy tool by either being issued to provide monetary stimulus or bearing interest.

Other central banks around the world, including the European Central Bank, are also exploring the possibility of issuing a digital currency.


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