Yesterday the Reserve Bank of New Zealand (RBNZ) launched its second central bank digital currency (CBDC) consultation. Since its first inquiry in 2021, it has put considerable effort into exploring how it plans to position and design the digital currency. The consultation will run until July 26. Based on feedback and the preparation of a business case, a decision will be made on whether to proceed to Stage three, the preparation phase.
Regarding positioning, the digital currency will be a retail CBDC targeting both consumers and corporate use cases, with consumers as the primary focus. It won’t be designed for wholesale usage, but it will be allowed. At this stage, cross border payments are very low priority.
The RBNZ carefully considered how it wanted to position its CBDC on two spectrums – control and functionality. It concluded that it prefers the UK and Swedish models of acting as an innovation enabler. Hence, its role is to enable the platform and set guardrails. This implies moderate levels of control and a relatively feature rich digital currency, with the private sector heavily contributing to innovation.
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