Why are we looking into Digital Cash?
At least 134 countries representing 98% of global GDP, are investigating some form of central bank digital currency, including some of our major trading partners.
We are carefully defining and specifying what Digital Cash is. It can mean different things to people. We're doing this so that we can be confident about why it may or may not be suitable for Aotearoa New Zealand.
Our payments system has limited competition and innovation and lags behind others in meeting the digital needs of New Zealanders. Changes in the ways people pay for things could also pose challenges to monetary and financial stability.
Even if we don't adopt Digital Cash, we need to investigate it so we can identify other options and be ready to adapt to global changes in money and payments.
Currently, the digital form of the Reserve Bank-issued New Zealand dollar is only available to banks. Digital Cash would make it available to everyone.
Digital Cash would exist alongside banknotes and coins, and the electronic money in your bank account. It would be the first digital form of New Zealand currency issued and backed by the government, and available to the public. It is also called a central bank digital currency or CBDC.
No. We are committed to ensuring cash remains accessible in forms New Zealanders prefer.
We will continue to issue banknotes and coins for as long as New Zealanders want to use them. You will also be able to convert Digital Cash one-for-one to physical cash in New Zealand dollars, like the money in your bank account.
Digital and physical cash are complementary. Together they ensure people have access to trusted New Zealand dollars in forms that meet their needs.
Our Future of Money work programme includes a focus on ensuring the sustainability of cash. For example, cash service trials across 6 to 9 communities are due to be launched in 2025, compensating retailers for providing free cash-out services in rural areas with limited access.
Digitalisation is changing the way we pay.
Digital Cash would give you the option to use central bank money in a digital format, as well as in banknotes and coins.
We think Digital Cash will help encourage competition and innovation in money and payments solutions, while maintaining trust in our money. Digital Cash will help meet the needs of New Zealand’s evolving digital economy.
Next, we're doing further engagement, design and technical work, policy development and a cost-benefit analysis during 2025 and 2026.
We'll explore practical use cases for Digital Cash as our work progresses.
Ultimately, we will work with the Government to decide whether to introduce Digital Cash or not. If we decide to introduce Digital Cash, we expect it would be available around 2030.
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What are the problems Digital Cash would address?
You told us you want:
- cheaper, faster, and more inclusive ways to pay
- new functionalities like being able to make offline payments.
Digital Cash can encourage competition in the wider money and payments systems by:
- giving you more options and better access to central bank money
- allowing private companies to provide innovative services on an open, Digital Cash platform which may not be possible today.
A world-class money and payments system will also help reinforce the central role of the New Zealand dollar in a changing money and payment landscape globally.
EFTPOS and bank transfers are connected to your account balance at private banks or institutions, meaning they are based on privately issued money backed by the bank or institution’s assets. Digital Cash would be issued by us, just like banknotes and coins, meaning it is publicly issued money.
When you transfer Digital Cash to someone, they receive the same type of money—not a balance from a different bank. Since Digital Cash isn’t tied to banks, non-bank providers can also handle these transfers independently, opening up opportunities for new and competitive services.
Learn more about the different types of money
Another way that Digital Cash is different from EFTPOS is in the functionality it would offer. EFTPOS is mainly used for making in person purchases at the point of sale. Digital Cash could also be used at point of sale, plus it would offer wider functionality like peer-to-peer transfers (exchanging money with friends and family), and online/e-commerce transactions.
If we introduce Digital Cash, you could use it the same way you use money today, like sending money to whānau or friends or buying goods in shops or online. You could use Digital Cash to pay for things, instantly, anytime, anywhere in New Zealand at a reasonable cost.
We are exploring technical ways so Digital Cash can work offline. It’s like how Bluetooth lets you connect directly to others nearby—but in a safer and more secure way.
It would be a universally accepted digital form of payment.
Read more about how you could use digital cash in the future
We understand the challenges people face with some of the high costs around payments today, as confirmed by the consultation feedback.
We're still working out what fees, if any, will be charged to consumers. One of our aims with Digital Cash is to try and help reduce the cost of payments to New Zealanders.
Today, New Zealanders still can't make instant payments electronically to other people, unless they are both with the same bank.
With Digital Cash, you could make payments instantly. For example, you could instantly transfer money to someone in an emergency, or if you wanted to pay back a friend for something they had bought you, you could hold your phones together to transfer the money straight away. Instant payments also potentially support small businesses that are reliant on cash flow.
The Reserve Bank of New Zealand will not programme Digital Cash.
The payment process could be ‘programmable’ in a limited sense – like how you can set up automatic payments today. Digital Cash will enable you and others like fintechs to find innovative and better ways of making payments, while using the same money issued by us.
We want to enable a system where innovation and programmability is possible. For example, you'll be able to to set up an automatic monthly payment to instantly transfer Digital Cash to whānau or friends or pay your rent or mortgage.
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How will you make sure that Digital Cash is inclusive?
One of our 6 principles for Digital Cash is ‘universal’. To be universal, it must be accessible. Digital Cash has the potential to support inclusion because it is not profit driven and you won’t need a bank account to access it.
We're prioritising accessibility when designing Digital Cash. This included providing the consultation materials in alternate formats such as Braille, New Zealand Sign Language, Easy Read, Audio and Large Print. We heard from disabled communities that current payment options don't always meet their needs.
Yes. You won't need a bank account, but you will need a third-party service provider to access your Digital Cash. This could be through a bank.
You'll also need a payment mechanism like a digital wallet, phone or device app or a physical card to buy things.
We don't have a view on how many people should use it. We would like people to use it if they see it's necessary.
For us, it's important that Digital Cash is an option for people to use alongside other payment options, that people have choice, that it encourages innovation, supports competition and better services for all New Zealanders.
No. We're not introducing a social credit system. Protecting privacy and autonomy is a key focus of our work.
If Digital Cash is introduced, we will work with Parliament to create laws that protect digital autonomy, supported by institutional safeguards – like privacy laws, the independence of the Reserve Bank, and Parliamentary oversight – that reinforce this protection.
Ultimately the safeguard is the democratic process itself, and we don't think the design of a central bank digital currency can be a substitute for it.
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Will the government be able to see and control how I spend my Digital Cash?
The Reserve Bank of New Zealand, or the Government won't be able to see your transactions or be able to identify who you are. New Zealand’s Privacy Act and legal checks and balances would apply to Digital Cash. Any government agency that needed to view your data would need legal authority or permission to do so, just as they do today.
We know some people may be worried about how private Digital Cash would be. So are we. Digital Cash is being designed to be private. One of our 6 design principles for Digital Cash is ‘privacy centric’.
We intend to explore approaches that build on privacy protections used with private bank accounts today. Privacy protections could be through legislation or technology while making sure we comply with things like anti-money laundering regulations.
Education will also be needed to empower users so they control their own data and the use of it.
We believe that Digital Cash needs to protect privacy more than is currently required under the Privacy Act. We won't collect any of your personal data and we will design Digital Cash so that you have control over your own data, consistent with the Customer and Product Data Bill currently before Parliament.
We'll continue to meet anti-money laundering obligations as we do today.
We're responsible for making sure the financial institutions we regulate and supervise meet their obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.