Creating digital cash for Aotearoa

When most of us think about money, we think about the balance of our bank accounts and we think about the physical cash such as bank notes and coins we might have in our wallets.

With many parts of our daily lives becoming more digital, the Reserve Bank of New Zealand – Te Pūtea Matua is looking at the possibility of moni-matihiko, digital cash. Digital cash would be an electronic version of physical cash – it’s money we could spend without needing a bank account.

Digital cash would give New Zealanders the choice of using digital cash or using our regular bank accounts, cards, cash or any other ways we might make our payments. 

Planning for the future

Cash plays an important role in society because it allows everyone to participate in the economy. Cash doesn’t require a bank account and it doesn’t require government identification. It is familiar, convenient and easy to use.

For a long time, cash has been used anywhere and anytime to make payments. But as more goods and services become available online and the economy becomes more digital, there are more circumstances where cash can’t be used to make payments.

Digital cash could be one way that New Zealand’s money innovates and remains relevant and useful.

It could be:

• accessed from a digital wallet, payment card or phone app
• used to buy things online or in shops, or pay bills or send money to friends and family in an instant
• used when the power is out, or the internet is down.

Opportunities for learning

If New Zealand introduces digital cash, it will happen around 2030, and young people would likely be the first to use it. So, before it is designed, the Reserve Bank wants to know what features are most important.

“Young people are the ones who will be leading the technology and economic trends of the future. So it is important that as we look at creating digital cash, it reflects their choices, values and habits. This is why we really want to hear from young people at the outset of the process about what is important to them,” says Reserve Bank director of money and cash Ian Woolford.

For teaching and learning, this is an opportunity that could be explored across the curriculum, including numeracy, literacy, social sciences and technology.

What digital cash would offer students

Digital cash would be easy, instant, always available, private and safe.

Just like physical cash, digital cash would be denominated in New Zealand dollars and issued by the Reserve Bank. It could be swapped 1:1 with physical cash and the electronic money in a bank account.

It could be a way for students to:

• receive pocket money
• save up to buy something special
• split bills/costs at the dairy, supermarket, or a café
• pay for something in virtual reality, for example, in a video game
• pay with a contactless card or phone without a surcharge
• instantly pay for something bought on marketplace at the point of pick up.

Have a say

What are the benefits, challenges, or concerns that young people see with digital cash?

Watch this video about digital cash, it’s just 2 minutes long.

Digital cash explainer – Reserve Bank YouTube(external link)

Take the survey or make a submission:

Digital cash – Reserve Bank of New Zealand(external link)

The Reserve Bank consultation is open until 26 July 2024.