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  • L Hickey and S Pettigrove

Kiwis consult on the future of money

Updated: May 3

New Zealand's central bank (the RBNZ) has launched a consultation on the future money focusing on the risks and opportunities posed by private innovation in money, including cryptoassets and stablecoins.


The consultation is accompanied by an Issues Paper: ‘The Future of Money — Private Innovation’ (the Issues Paper) which explores private innovation in money with a focus on opportunities and risks to New Zealand.


The RBNZ's paper outlines its current thinking about innovation in private money and seeks feedback on:

  • the opportunities and risks posed by private innovation in money;

  • how these innovations might impact the RBNZ’s objectives as the steward of money; and

  • what regulatory responses could be required to help deliver those objectives in the context of private innovation in money.

The paper recognizes that there are opportunities attached to ‘beneficial innovation in private money’, which may in turn:

help broaden access to the money and payment system from outside the banking sector. Broadening access supports competition, which is key to delivering efficiency and supporting further innovation.

The RBNZ's paper is written from the perspective of the RBNZ as a steward of money. The RBNZ is collaborating with other stakeholders, such as members of the Council of Financial Regulators (CoFR) to address cross-cutting risks and shared challenges. The CoFR has welcomed the continued exploration of whether crypto-assets and their underlying technologies such as DLT and cryptography can support greater competition and more innovation in financial services.


The Issuers Paper discusses broader developments in the money and payments system, including:

  • concerns about existing inefficiencies in private money (e.g. in cross-border payments), and calls by some for wholesale ‘disruptions’ in money;

  • the perceived need for and benefits offered by new forms of money in an ever more digitalised economy (e.g. web3 and the metaverse);

  • the claim of crypto-assets to be ‘money’ and the potential for them to be used this way, which purports to address those new or existing demands;

  • the declining use of cash, the only public alternative to new and existing forms of private money, and the potential impact on central bank money as the value anchor; and

  • the growth of crypto-assets without regulatory safeguards, or a value anchor in central bank money.

The RBNZ's broadly based consultation on the future of money is a welcome contribution to the global debate on these issues. The decision to examine this issue in the round will no doubt inform broader policy development as regulators look to harness the opportunities and mitigate the risks posed by private innovation in money. As usual, New Zealand appears to be charting a progressive path which will be closely watched across the Tasman.

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