The rapid overtake by cryptocurrencies has surely haunted many Central and National Banks around the world. Despite all this, no proper solutions could aid the Reserve banks to stand tough against the ever-rising crypto market. However, New Zealand came up with a long-awaited solution for this, by introducing the Central Bank Digital Currency (CBDC).
New Zealand’s Much Awaited Reforms
Among many countries’ Reserve banks, New Zealand’s Reserve bank has also been facing a tremendous downfall with the rise of the crypto industry and with the introduction of various stable coins.
New Zealand reveals its plans to introduce a new Central Bank Digital Currency (CBDC). This digital currency will be New Zealand’s Reserve bank’s sole reply for the overtake by the crypto industry. In addition, another reason for the Reserve bank to introduce the CBDC is the reduction in usage of hot cash among the people.
Moreover, this CBDC will be based on the backing of the government of New Zealand. The Reserve bank of New Zealand states this CBDC will be the most effective solution for the financial system and currency domination by the crypto market’s stable coins.
The Reserve bank of New Zealand revealed its plans through a Tweet on its official Twitter page.
The Official’s Comments
Accordingly, the Reserve bank will launch the CBDC and get furthermore feedback and will be working on them if developments are needed. This CBDC will not function alone as the sole currency, it will be along with the government’s backed up money too.
The Assistant Governor of the Reserve bank of New Zealand, Christian Hawkesby once in the fourth quarter of 2020 stated that they wouldn’t be needing a CBDC to be deployed. However, recently he took back his older comments on CBDC. Now, he mentions, the CBDC will for sure help in overcoming the negative impacts of cash usage reduction. Also, he admits New Zealand will thrive from a completely new experience through this.
In spite of all this, he goes on that further real-world applications and usages are to be studied closely before passing over solid concluded papers for the CBDC implementation.
The Governor concludes that the future will be an economy completely cashless, as even today many prefer digital payments.
Recommended for You
