The Reserve Bank is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, says Assistant Governor Christian Hawkesby.
“Cash is being used less as a means of payment and access to cash is declining,” he told the Royal Numismatics Society of New Zealand annual conference today is a speech.
“However, cash provides important benefits to many people, including legal tender money, social and financial inclusion, peer-to-peer payments, backup payments, and privacy and autonomy,” said Hawkesby.
“We encourage every banking sector participant to consider their role in supporting the needs of their customers, including those who depend on cash for their everyday needs”, he said.
To support its strategic leadership, the Reserve Bank is building new analytical, policy and governance capability.
“In the years ahead, some of the biggest questions facing central banks could well be around the future of money itself”, Hawkesby said.
The Reserve Bank’s immediate priority is to work with the banking and service industries to ensure that the cash system continues to be fit for purpose. Initiatives include reshaping vaulting arrangements, banknote standards, and building towards a sustainable future. Ultimately, a more transformational solution might be needed.
“Looking forward, we remain open minded about how the technology of money and payments will continue to evolve,” Hawkesby said.
He added that central banks around the world, including the Reserve Bank, are researching retail central bank digital currencies (CBDCs).
“Although we have no imminent plans to issue a CBDC, we are well-connected and considering these developments very closely.”
The Reserve Bank’s new direction for money and cash has emerged from its Future of Cash – Te Moni Anamata initiative which involved extensive public consultation in 2019.