New Zealand Reserve Bank Says Future Digital Currencies Will Become More Realistic Than Cash

Journalist:
Clay Michael Gillespie @thelivingaspect
November 12, 2014
New Zealand Reserve Bank

Deputy governor Grant Spencer of the New Zealand Reserve Bank commented on digital currency during his speech at the Payments New Zealand conference in Auckland. His feelings toward digital currency looks hopeful and positive compared to the response from other countries.

“As the currency issuer, the Reserve Bank does not feel threatened by Bitcoin which seems to behave more like a commodity than a currency.”

According to stuff.co.nz, Spencer continued his comments on digital currency, giving a favorable opinion on the future.

“However, I do not doubt that future digital currencies will become more realistic substitutes for cash.”

Spencer added that 30 years ago, payments were overwhelming made using cash and checks, but now the growth areas are online, contactless and mobile phone applications. He said that the greater use of technology is making our lives easier, but also brings operational risks.

New Zealand Responding to the Changing Financial Landscape

One of the larger portions that Spencer mentioned was the amount of new businesses entering the financial and payment market, such as Google, Apple and the now bitcoin-friendly PayPal. According to him, the central bank expressed worry about both cyber-attacks and the involvement of these “new players”, as the aforementioned New Zealand news source reported.

The stance of the New Zealand Reserve Bank is one that favors these companies though, as well as bitcoin and digital currencies as a whole.

“In the international context, the Reserve Bank’s regulatory framework in the payments area is at the non-intrusive end of the spectrum.”

Designated major companies in the financial sector as well as new players must have their rules approved by the Reserve Bank and the Financial Markets Authority, but choosing to be designated was completely voluntary. New Zealand relied on persuasion and industry engagement rather than intrusive tactics.

New Zealand’s Economic Freedom Policies

According to the Heritage Foundation’s 2014 Index of Economic Freedom, New Zealand ranks fifth out of the top ten countries experiencing economic freedom behind Switzerland, Australia, Singapore and Hong Kong.

New Zealand Reserve Bank’s viewpoints on digital currency coupled with their economic freedom policies seem to be a more-than-suitable fit for bitcoin and altcoin users looking to start businesses in their country or expand internationally. While New York is looking to tighten and strengthen regulations on bitcoin businesses and users, a wave of relief washes over most bitcoin users to hear some positive regulation news.

Also Read: Bitcoin Regulator Benjamin Lawsky Might Resign from NYDFS

Spencer said:

“The challenge for [Payments NZ] is to promote efficiency and innovation by allowing wider participation in the system, while at the same time continuing to manage system risks.”

New Zealand plans to host its first bitcoin conference from November 29-30 called Bitcoin South in Queenstown. Andreas Antonopoulos, bitcoin entrepreneur and recent liaison from the bitcoin community to the Canadian Senate, will speak at the event alongside many other financial professionals in digital currency.

After speaking with the Canadian Senate, the Canadian government seemed quite receptive of bitcoin and digital currency as a whole, leaving hopeful bitcoin users anxious to see what came of their discussion.

What do you think about the statements of the New Zealand Reserve Bank? Comment below!

Images from Geograph.co.uk, Flickr and Shutterstock.

Last modified (UTC): November 12, 2014 10:07

Tags: new zealand
Clay Michael Gillespie @thelivingaspect

Clay Gillespie a writer and reporter for many different platforms across the tech industry. He holds a B.S. in Public Relations from Ball State University, and freelances for different clients in technology and cryptocurrency. For more information, visit his personal website, claygillespie.com.