The Reserve Bank of New Zealand has asked consumers to comment on the future of cash as it copes with the country’s increasingly digital transformation.
The central bank is considering requiring some merchants and government agencies to accept cash, and requiring banks to provide cash services despite the spread of online payment systems.
The Reserve Bank is also discussing the potential for a Central Bank Digital Currency to be issued along with cash.
The bank is committed “to keeping cash available for as long as it is needed”, assistant governor Christian Hawkesby said on Tuesday in announcing a public consultation on the future of cash in New Zealand.
The consultation outlines a range of external drivers facing the cash system that will lead to significant resilience issues for the cash system if left unchecked, he said.
“Falling cash use for everyday needs and the retreat from cash services by banks and retailers threaten financial and social inclusion for some,” he added.
That has the “potential to undermine the important role cash provides under-pinning confidence in private money in bank accounts”, Hawkesby said. “Knowing money can be withdrawn from bank accounts into cash provides confidence.”
Hawkesby says the central bank plans to release a summary of submissions received and an indication of next steps before the end of April 2022.
“We will firm up proposals next year following the feedback we’re inviting now and then consult further before making final decisions,” he said.
The bank has now issued three papers as part of the consultation titled the “Future of Money – Cash System Redesign”. It joins papers published two months ago setting out key concepts feeding into today’s paper.
Submissions close on December 6 for the first two papers and March 7 for the current paper.
- George Russell