Reserve Bank of New Zealand
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Reserve Bank of New Zealand Requests Feedback on Future of Money Proposals

The Reserve Bank of New Zealand (RBNZ), the country’s central bank, has launched a consultation on the future of money, focusing on both the risks and opportunities posed by private innovation in money, including crypto assets and stablecoins.

The central bank aims to get feedback on its proposed approach to opportunities and challenges of new private money forms. Companies based in New Zealand involved in financial services are urged to take an interest and provide feedback of their own.

The paper set out a range of the reasons for the creation of the issues paper, including:

  • Concerns about inefficiencies with existing private money
  • Claims that crypto assets can be used as ‘money’
  • The declining use of cash as the only public alternative to private money
  • The potential impact of private money on central bank-backed money as the value anchor and impact on monetary sovereignty

New Zealand’s central bank’s primary interest is in “significant forms” of private money. Firstly, the bank aims to prioritise the largest and most popular forms of private money. Despite this, the overall aim is to cover all forms of private money.

Robbie Taylor, manager of money and cash policy at RBNZ
Robbie Taylor, manager of money and cash policy at RBNZ

Robbie Taylor, manager of money and cash policy at RBNZ, explained how the bank considered which aspects to address. Taylor said: “In New Zealand, the uptake of crypto assets is not very high and very low in terms of the use in a monetary sense to buy and sell things. But many New Zealanders have started to use them as an investment or speculative asset.

“Crypto assets have a number of risks compared to conventional money that needs to be managed alongside the opportunities they might present.

Continuing, Taylor explained: “Private innovation also has implications for other regulatory regimes in the financial sector and beyond. Overall, we’re really mindful that our interest as a central bank is not the only interest in this area. We understand that other regulators might have an interest too.”

RBNZ’s proposals to balance risk and innovation

Overall, RBNZ’s proposal is to move forward in two ways. The central bank has an obligation under the Reserve Bank of New Zealand Act, to monitor private innovation and money. It looks to develop and monitor a framework to understand how new forms of money are emerging and being used. It aims to be in a good position to take action, if necessary to best protect New Zealander’s interests.

The second area of the proposal is the consideration of the role of regulation. In this area, the central bank calls for feedback to understand perspectives on how regulation can be targeted. It aims to ensure a balance between risk and opportunity is achieved in an appropriate way.

Ian Woolford, director of money and cash at RBNZ
Ian Woolford, director of money and cash at RBNZ

Ian Woolford, director of money and cash at RBNZ, explained the aims of the central bank. He said: “Our objective is for New Zealand to have a reliable and efficient money and payments system that supports innovation and inclusion. We certainly think that competition in private money is healthy. But, we need a level playing field where regulation matches risk across all technologies. Consumers should have real choice in how they pay and save, and trust in private money should be preserved.”

“On the flip side, new forms of private money can also pose risks to users and to the economy more generally. We may need to address private forms of money that don’t appropriately safeguard the interests of users, or that misuse market dominance. We need to ensure neither the stability of the financial system nor our ability to influence the economy through the likes of interest rates is lost.”

The time period for feedback on the issues paper is to end Monday 3 April 2023.


  • Tom joined The Fintech Times in 2022 as part of the operations team; later joining the editorial team as a journalist.

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