The central bank announced that digital cash will coexist with physical cash options and will not require a commercial bank account for usage. It will only need a digital wallet, payment card, or mobile app. This move is expected to enhance privacy, security, and trust for users. The central bank assured that it will not control or monitor how people spend their money.
In addition, the digital cash will work via Bluetooth, allowing payments to be made without an internet connection. This development is part of a multi-stage exploration starting in 2024 and anticipated to continue until approximately 2030. There will be ongoing opportunities for public engagement during this period. The decision to explore digital cash comes after criticism of stablecoins by Adrian Orr, the governor of the Reserve Bank of New Zealand.
Orr stated that stablecoins cannot replace traditional currency and are inherently unstable.