The Future of Cash – Te Moni Anamata

Cash use is falling, but some of us rely on it more than others. Retailers are not obliged to accept cash, although we urge providers of essential goods and services to do so. Declining cash use is one of several pressures on the cash system which involves the many organisations and individuals who move, store, and use cash.

Following extensive public consultations in 2019, we have set priorities to take on a new role of steward of the cash system, preserve the benefits that cash provides, work with the sector on improvements to the cash system to keep it resilient and efficient, and to build capability and consider wider technology of money and payments issues, including the potential for a Central Bank Digital Currency (CBDC).

Cash is being used less as a means of payment, and access to cash is declining. However, cash provides important benefits to many people, including legal tender money, social and financial inclusion, peer-to-peer payments, backup payments, privacy and autonomy. This section outlines policy and engagement work which confirmed these benefits, along with supporting data and research on cash use.

The Reserve Bank’s current 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. 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. Ultimately, a more transformational solution might be needed. This section describes this work and progress.

Recognising the Reserve Bank’s role and responsibilities – as issuer and steward of New Zealand’s money and operator of key payments systems – we are building our analytical, policy and governance capability to support this strategic leadership. Looking forward, we remain open minded about how the technology of money and payments will continue to evolve. Central banks around the world, including us, are researching retail central bank digital currencies (CBDC). Although we have no imminent plans to issue a CBDC, we are well-connected and considering these developments very closely.