Reserve Bank of New Zealand Requests Feedback on Future of Money Proposals

of Reserve Bank of New Zealand The country’s central bank (RBNZ) has launched talks on the future of money, focusing on both the risks and opportunities posed by private innovation in money, including cryptoassets and stablecoins.

The central bank aims to get feedback on the proposed approach to the opportunities and challenges of the new private money form. New Zealand-based companies involved in financial services are encouraged to take an interest and provide their own feedback.

This paper explains the various reasons why I created the paper in question.

  • Concerns over the inefficiency of existing private funding
  • Claims that crypto assets can be used as “money”
  • Reduced use of cash as the only public alternative to personal money
  • The Potential Impact of Private Money on Central Bank-Backed Money as a Value Anchor and its Impact on Monetary Sovereignty

The Central Bank of New Zealand’s main interest lies in ‘significant forms’ of private finance. First, banks aim to prioritize the largest and most popular forms of personal money. Nevertheless, the overall aim is to cover all forms of private funding.

Robbie Taylor, Money and Cash Policy Manager, RBNZ

Robbie TaylorThe RBNZ money and cash policy manager explained how banks considered which aspects to work on. Mr Taylor said: However, many New Zealanders have started using them as investments or speculative assets.

“Crypto-assets have more risks compared to traditional currencies that need to be managed along with the opportunities they may present.

Continuing, Taylor explains: All in all, we really keep in mind that our interest as a central bank is not the only interest in this area. We understand that other regulators may also be interested. ”

RBNZ’s proposal to balance risk and innovation

Overall, the RBNZ’s proposal is to move forward in two ways. the central bank Reserve Bank of New Zealand Act, watch private innovation and money. We aim to develop and monitor a framework for understanding how new forms of money are emerging and how they are being used. We aim to put ourselves in a good position to take action, where necessary, to best protect the interests of New Zealanders.

The second area of ​​the proposal is consideration of the role of regulation. In this area, central banks are seeking feedback to understand the outlook for how they will be regulated. The aim is to ensure a balance between risks and opportunities in an appropriate manner.

RBNZ Director of Money and Cash Ian Woolford said:
RBNZ Director of Money and Cash Ian Woolford said:

Ian WoolfordThe RBNZ Director of Money and Cash explained the purpose of the central bank. he said: We certainly believe that private money competition is healthy. But we need a level playing field where regulation matches risk across all technologies. Consumers should have real choice in how they pay and save, and trust in their personal money should be maintained. “

“On the flip side, new forms of private money can also pose risks to users and the economy more generally. It may need to be addressed, and we need to ensure that the stability of the financial system and our ability to influence the economy through things like interest rates are not lost.”

The question paper feedback period ends on Monday, April 3, 2023..

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