What is digital cash?
Digital cash would be a new type of money in addition to 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.
Digitalisation is changing the way we pay.
Digital cash would be an electronic form of cash. It would give you the option to use central bank money in a digital format, as well as cash in banknotes and coins.
We think digital cash will help maintain trust in our money and encourage innovation in how we pay for things. We are planning for a future in New Zealand that has less cash, but not one that is cash-less.
Just like physical cash, digital cash will be denominated in New Zealand dollars and issued by us. You could swap your digital cash 1:1 with physical cash, and other forms of NZD, like the electronic money in your bank account.
If we decide to introduce digital cash, we expect it would be available from 2030.
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What would I be able to use digital cash for?
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. You could even use it when the power is out, or the internet is down.
It would be a universally accepted digital form of payment.
Read more about how you could use digital cash in the future
There are actually a few differences between using an EFTPOS card and digital cash.
The first is that EFTPOS is connected to your bank account balance at a private institution, meaning it is based on privately issued money. Digital cash would be issued by the Reserve Bank, just like coins and bank notes, meaning it is publicly issued money.
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 will be also be useable at the point of sale as well, but it will also offer wider functionality such as peer-to-peer transfers (exchanging money with friends and family), and online/e-commerce transactions.
We understand the challenges people face with some of the high costs around payments today. One of our aims with digital cash is to try and help reduce the cost of payments to New Zealanders. We're still working out what fees, if any, will be charged to consumers. This is something we'll consider based on feedback we've received and further work.
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, 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.
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 family members or friends or pay your rent or mortgage.
The Reserve Bank of New Zealand will not programme digital cash.
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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 as it is not profit driven and you won’t need a bank account to access it.
We are prioritising accessibility when designing digital cash. This includes providing the consultation materials in alternate formats such as Braille, New Zealand Sign Language, Easy Read, Audio and Large Print. These will be available soon.
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. The Reserve Bank of New Zealand isn't introducing a social credit system. Protecting privacy and autonomy is a key focus of our work.
New Zealand has a robust framework of 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.
We're committed to continuing to make cash available in forms that New Zealanders want to use. We are planning for a future that has less cash, but not one that is cash-less.
We have a big focus on the cash system.
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Will the government be able to see and control how I spend my digital cash?
We know some people may be worried about how private digital cash would be. Privacy will be built into the design of digital cash. The Reserve Bank of New Zealand, or the Government would not 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.
If we decide to move forward with digital cash, we expect to work with Parliament on laws to make sure digital cash and the data it generates is used in the way that reflects the values and aspirations of Aotearoa New Zealand.
Digital cash will be designed with robust privacy protections.
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.
One of our 6 design principles for digital cash is ‘privacy centric’.
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 Consumer Product 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.