The Reserve Bank’s latest round of consultation on a possible central bank digital currency (CBDC) closes today.
The thick and probably expensive (at least one of the documents was produced jointly with the consultancy firm Accenture) set of consultation documents came out a few months ago. I thought I had run out of time to read and submit on them because somehow I’d got it into my head that the deadline was last week. It was nice of the Reserve Bank to send out a reminder to interested parties that the deadline was in fact today.
Until I read the documents yesterday I still wasn’t sure I’d bother. But when I did read them I was astonished at how thin (in analytical etc substance) they were, and how weak the case seemed to be for the rather limited CBDC they were proposing (as well as how little thought seemed to have been given to how things might evolve, beyond the Reserve Bank’s control, once a CBDC was introduced (which, in fairness to the Bank, they envisage as still being some years away, beyond even the terms of Adrian Orr and Neil Quigley)).
I wrote a short submission on an earlier (2021) Reserve Bank consultation on these issues. The submission I lodged this afternoon was not much longer (5.5 pages). With more time I might have treated some of the issues in more depth, but really the onus is on the Bank to make their case, and to this point they have not done so.
My full submission is here.
The introduction and final paragraphs follow
It might make an interesting OIA for someone to ask the Reserve Bank how much money has been spent on CBDC analysis and proposals over the last five years. That sum seems unlikely to have been small.
croaking cassandra 
It does rather seem that the question RB asked itself was “why not?” or perhaps “why not have an experiment?” than “why?”.
There are many much more pressing questions.
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It just way too band-wagonish for our RBNZ, and a very late arrival to the party at that. Does any one actually use crypto in any practical fashion , other than for speculation, scam payments or illegal transactions? All those blockchains everywhere make for an awful lot of data and all that problem solving to create new currency uses a lot of power. As you say crypto is a solution looking for a problem and it still hasn’t found one after all these years.
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apparently many non-Bitcoin crypto assets uses way way less energy. but your wider point remains: v little genuine and legal economic transacting seems to occur, and it isn’t obvious what the impetus would be to change that in the next 5-10 years
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Brilliant analysis of the scant effort to really sell this to the people of NZ, with compelling reasons why we would be better off. I bet those reading the submiussions will go: Oh no, we’ve been stumped! As you say Michael: ‘Trust us because we say so’, given the RBNZ’s track record, is good enough reason to send this straight to the shredder.
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I agree that the case for going ahead with this looks weak, and the costs and risks are unclear. It wouldn’t surprise me if a CBDC didn’t earn enough seigniorage to cover the costs of setup and operation.
There has long been a case for giving easier public access to Crown/RB credit risk, but there are simpler ways to do this than by a CBDC; and deposit insurance will effectively do it anyway.
Putting it on the shelf for now looks right to me.
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No there is no threat to the central bankster’s economic monopoly.
Imagine a morally bankrupt (communist-tyrannical ) State having total control of what you can buy with the fruit of your labor using their new fictional reserve “digital currency” system . They may as well pull the “social credit system” out of their WEF bag at the same time and pretend they are not planning it for 2030. What the govt calls “conspiracy theory” (which is not agreeing with their narrative) went mainstream in 2021.
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