New Zealand is said to have launched a study on the possibilities, benefits and risks of a central bank digital currency known as the CPTC.
Looking to the future
This was done by the Reserve Bank of New Zealand a News release. From this it became clear that the Reserve Bank of New Zealand would begin to consult with the public on the most important financial technologies for the ‘future of how New Zealanders pay and save’. Central Bank Assistant Governor Christian Hawksby commented on the new developments:
“Not only do we have to do what we do as an asset manager, we look at what a flexible and stable money and currency system will look like in the future in New Zealand, and how we can use digital innovations in money and pay. With this we really look to the future.”
The majority of central banks are investigating the CPTC
New Zealand was not the first country to explore the possibility of its own CPTC. China, for example, has made good progress in this process and expects to be able to start soon. This will make China the first country in the world to launch its own CPTC. In addition, many countries are now conducting a similar study. So the decision to launch the CPTC will be followed by more countries in a relatively short period of time.
In fact, according to a study by the Bank for International Settlement, also known as PIS, 86% of central banks worldwide are now exploring the potential for CPTCs. About 60% of people with relatively new technology will already be doing some testing.
In August of this year, the Central Bank of New Zealand will release a series of documents to the public, including CPTCs and digital currencies.
Transition to a cashless economy
The bank also points out that the possibility of a central bank operating in conjunction with the currency of a digital currency is now being fully explored. This can lead to some issues that need to be resolved. It also looks at the current monetary system and how it needs to be modified to meet the needs of users.
Like many countries around the world, the use of money in New Zealand is gradually declining. 80% of New Zealanders are still said to have little money in their pockets. The country lags behind its economic counterparts when it comes to money gradually. However, the country is now seeing a decline in the use of large amounts of money. This is because the number of automatic payment methods has only increased in recent years.
So the digital version of the local Fiat coin does not seem strange. Such CPTC may play a key role in transitioning to a fully cashless economy, or at least reducing cash payments. However, it is not yet clear whether New Zealand will actually choose a CPTC, which is a positive sign.
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