New Zealand Central Bank Shares its Official View On CBDC.

New Zealand Central Bank Shares its Official View On CBDC.

2021-10-01 | Big Bob

New Zealand Central Bank Shares its Official View On CBDC.

The Federal Reserve Bank of New Zealand (RBNZ) has published a paper offering its views on the finance of the financial institution (CBDC). This paper describes the objectives, structure of the CBDC, and the potential benefits and risks associated with it. The bank will want to comment on the proposed paper by December 6. This document focuses on the CBDC's "standard" digital currency for "any person or business that wants to use it." The financial institution has stressed that the New Zealand CBDC could also be a digital currency issued by the bank alongside cash. Although the currency circulating is growing in the country, it is still used in mass transactions but to a lower extent states the bank. “We want people to understand that the case of the savings is well understood and accepted by the Federal Reserve Bank. Cash will last as long as some of us need it, ”said RBNZ Assistant Manager Christian Hawkesby. The paper also outlines two major CBDC technology projects, including the "account-based" CBDC based on standard account-based structures and the "tokens-based CBDC," enabled new technologies such as blockchain and public and private keys cryptography. According to the RBNZ, CBDC-based tokens may allow for the automatic execution of certain actions such as paying taxes or paying money through smart contracts, thereby reducing the need for hand or third-party involvement. The tokens-based CBDC can also support the development of new payment services in stores, in addition to the bank. "Like other digital currencies, the CBDC must be vigilant in the event of cyberbullying, cybersecurity, and will be required to comply with all applicable laws," the RBNZ added. "Similarly, while the CBDC has the potential to act as a catalyst for innovation and competitiveness within the broader ecosystem and to shop for the environment, we'll need to consider the possibility of overcrowding innovation."

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