Read the Future of Money – Stewardship issues paper (PDF 2.5 MB)
Read more about the Future of Money – Summary of responses to our 2021 issues papers (PDF 1.3MB)
Read the public responses to our 2021 issues papers
Download a copy of the feedback form (PDF 120KB)
Part A provides background information to let you engage fully with the rest of the paper. It includes descriptions of the main terms and assumptions, and explains why central bank money matters. It covers:
Part B outlines how we propose to act as steward of money and cash and describes the proposed priorities for policy. Consultation questions are listed at the end of each section. This section covers:
The appendices provide a glossary and extra information, including a comparison of our proposed approach to stewardship with a commonly applied framework. These cover:
This issues paper is about money. The systems that provide cash and other forms of money and that enable the making of payments exist as a complex, interconnected network. This network—‘the monetary system’—underpins everything that happens in the economy. Ensuring that the monetary system is healthy and efficient and meets the needs of stakeholders is a core responsibility of any central bank. Meeting the needs of stakeholders increasingly means providing innovative and efficient options for people. One characteristic of a healthy monetary system is that it can adapt to innovation and improve in a safe and resilient way.
This is the first in a series of papers that seek feedback on a number of issues related to the health, efficiency and choices offered by the monetary system. The purpose of this paper is to:
One of our important functions in maintaining the health of the monetary system is the issuing of central bank money, in the form of cash, to the public. Central bank money performs two vital tasks:
An important assumption underpinning this paper is that New Zealanders value monetary sovereignty.
We have monitored and reported on developments affecting New Zealand’s monetary system for some time. In 2017, we launched an investigation into cash use and cash distribution. This led to public consultation on cash-related issues in 2019.2 Then in 2020, we created a new department—the Money and Cash department—Tari Moni Whai Take to better deliver on our responsibilities for the smooth functioning of the monetary system.
Legislative changes (in 2019 and 2021) have been happening alongside our ongoing work in this area. Together, the legislative changes and establishing the Money and Cash department have increased our capacity to act to ensure money and cash in New Zealand, and the monetary system, are meeting the needs of New Zealanders.
The monetary system and the environment that surrounds it are always changing. Three key trends in the monetary system are important drivers of the issues that underpin the proposals in this overarching paper (and the series of more detailed papers that will follow it):
In our view, these trends pose both opportunities to stimulate innovation to enhance the prosperity and wellbeing of New Zealanders and credible threats to the stability and functioning of the monetary system.
Given the trends outlined above, we intend to expand and seek to formalise our system stewardship role in respect of money and cash issues. Our objectives as steward are to ensure, now and in the future, that the money we issue as a central bank (central bank money) is:
This, in turn, will ensure that New Zealanders have access to money in forms that suit them and their changing needs.
In delivering this stewardship role, we intend to take a proactive approach, ensuring the systems we oversee are modern, agile and forward-looking. As some responsibilities for policies that affect the monetary system are held outside the Reserve Bank, we will work in a collaborative and coordinated way with other agencies to take a strategic, system-wide approach. Our preliminary analysis suggests we may need more powers if we are to fulfil our stewardship responsibilities. This paper explains where we think these regulatory gaps lie.
In our role as steward of money and cash issues, we will prioritise work in the following three areas:
This issues paper is accompanied by others on the topics of central bank digital currency (September 2021) and cash system redesign (November 2021).