Central Bank Digital Currency to be used in New Zealand

Central Bank Digital Currency to be used in New Zealand

The Reserve Bank of New Zealand eyes Central Bank Digital Currency (CBDC) to work with cash as government-backed money. Also, it is set to evaluate the issue around the emergence of cryptocurrency assets like stablecoins.

The central bank will open public consultations about CBDC and stablecoins as a possible solution to the ongoing reduction of cash use.

On July .07, the RBNZ announced that it would release a set of money and cash issues papers from August to November and collect the public’s feedback. It will build upon its previous consultations last 2019, which is called “Future of Cash”

Furthermore, the central bank will introduce and obtain feedback on crypto-focused papers that will be used to see the potential of CBDC.

Alongside this, research will also be conducted on the unspecified issues that appeared from innovations in money and payment technology. According to a researcher, cryptocurrencies like Bitcoin and stablecoins are included in this.

An analyst said that the central bank of New Zealand seems to be open-minded toward the implementation of CBDC. However, he added that it has highlighted that a measured and guarded approach is required.

Last October 2020, the bank’s assistant Governor stated that it had no coming plans to deploy the digital currency. Also, he noted that the bank’s policymakers must take a new and holistic approach to issue currencies that meets the needs of the public. In doing so, he added that there is so much work that needs to be done. Even so, he recently said that the central bank wants to explore the CBDC’s potential in addressing some of the disadvantages of reducing the use of cash.

Moreover, despite the declining number of locals who use cash, the bank said that it is still widely valued since it ensures inclusion. Also, it gives the citizens a choice to pay and save money.

New Zealand Retirement Fund Allocated 5% to BTC

New Zealand Wealth Funds Management has operated the KiwiSaver Growth Strategy, which is a $350 million retirement plan.

Recently, it has been reported that it allocated 5% of its assets to Bitcoin, which underscores the steady stream of investors who enter the digital asset space.

According to the CIO of Funds Management, Bitcoin has a huge similarity to gold as an asset, and this is one of their reasons for entering the trade. He also added that in the next five years, BTC would be featured in more KiwiSaver products.

The firm explained that they bought Bitcoin for the first time last October 2020 when it was valued at $10,000. 

Moreover, New Zealand Fund Management needs to alter its offer documents to allow crypto investments to execute the trade.