The Reserve Bank of New Zealand (RBNZ) released the responses to its public consultation on Digital Cash this Tuesday. The consultation had the highest response rate to any RBNZ consultation, showing that there a strong public interest in Digital Cash. The consultation’s responses can be found here.

Who needs to read it? Why?

All participants in the financial services industry should read these responses. From this consultation, the RBNZ has indicated what the potential timeframe and format may be for Digital Cash. Members of the general public should also read the consultation responses which clarify shared concerns of potential users.

What does it cover?

The RBNZ found five key themes from the consultation responses.

1. Kiwis value cash: The RBNZ emphasised that Digital Cash will not replace physical cash and is intended to provide more choice when making payments.
2. Kiwis are concerned about privacy and control: 90% of respondents were worried about monitoring on Digital Cash usage. The RBNZ acknowledged that more work is needed around privacy but reiterated that Digital Cash will be private if it is introduced.
3. Kiwis are unsatisfied with current payment options: 60% of respondents wanted the ability to make real-time payments even without power or internet. They also wanted reassurance that they could get their Digital Cash back if it was stolen. 
4. Kiwis want Digital Cash to be free to use: The RBNZ has found that current payment methods are inequitable and more expensive for members of disabled communities to use. 
5. Kiwi businesses want Digital Cash to meet business-to-business and wholesale settlement needs: The RBNZ echoed this interest and stated that Digital Cash would address the lack of competition and innovation in New Zealand’s payment markets.

The RBNZ has indicated that further analysis will be undertaken to decide whether Digital Cash will be introduced in the future. If it is, they have indicated that it would be available from about 2030. 

Our view

We welcome the RBNZ’s consultation responses. We agree that New Zealand’s payment markets will benefit from more competition and innovation. We support the RBNZ’s desire to undertake further cost-benefit analysis and consultations regarding Digital Cash. 

*Disclosure – MinterEllisonRuddWatts Partner Jeremy Muir is a member of RBNZ's advisory group in relation to development of its digital cash proposals. 

What next?

We will follow the RBNZ’s developments on digital cash as the design phase continues in 2025. In the meantime, our previous commentary on the Digital Cash proposal can be found here.

If you have any questions regarding the RBNZ’s consultation results, please contact one of our experts. 

This article was co-authored by Ivan Zhang, a Summer Clerk in our Financial Services team.