The Reserve Banking company of New Zealand (RBNZ) published an event paper providing its perspective on central bank digital currencies (CBDC).

The newspaper outlines CBDC purposes, designs, equally well equally the potential benefits and associated risks. The bank will be seeking comments on the proposed paper until December. 6.

The document focuses on a "full general-purpose" CBDC that is a digital currency issued to "any individual or business that wants to utilise information technology."

"Such a 'full general-purpose' CBDC would be closer in function to cash and meliorate placed to fulfil the role of central bank money than a 'wholesale' CBDC," RBNZ wrote.

The fundamental bank emphasized that a potential New Zealand CBDC would be digital money issued by the bank alongside cash. While the amount of greenbacks in circulation has been growing in New Zealand, information technology is still used "proportionately less for transactions past nearly people," the banking concern noted.

"Nosotros want people to know that the instance for keeping greenbacks is well understood and accepted by the Reserve Bank. Cash is here to stay for equally long equally some of usa demand it," RBNZ Assistant Governor Christian Hawkesby said.

The paper as well points out two major technological CBDC designs, including an "account-based" CBDC that relies on conventional account-based structures and a "token-based" CBDC, which is enabled past new technologies such as blockchain and public-private key cryptography.

According to the RBNZ, a token-based CBDC could enable the automatic execution of sure deportment similar hire or neb payments through smart contracts, thus reducing the need for manual or third-party involvement. A token-based CBDC could as well support the evolution of new retail payment services, the bank added.

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The key banking concern also said that its proposed CBDC offers an opportunity to design a form of money that balances interests of both privacy and traceability. "Users may desire to retain full privacy in transacting, for either legitimate or unlawful reasons. Meanwhile government agencies may want to retain some traceability of CBDC balances or tokens to reduce tax evasion or abstention, or money laundering and financing terrorism," RBNZ noted.

The RBNZ officially appear its plans to open upward public consultations regarding a CBDC in July. Last year, Hawkesby claimed that New Zealand had "no imminent plans" to effect a CBDC.