Reserve Bank Future of Money

Stewardship / Central Bank Digital Currency Submission

December 6th 2021

This is only the introduction and conclusion.

Read the full submission here (pdf)

Introduction

One of the first statements in the executive summary of the Stewardship issues paper is “An important assumption underpinning this paper is that New Zealanders value monetary sovereignty”.

Monetary sovereignty should not just be an important assumption. It should be at the very heart of everything the Reserve Bank does – its first priority.

“Only central bank money performs this role. This means that central bank money ensures that New Zealand retains ‘monetary sovereignty’, by having access to independent monetary policy as a tool to achieve price stability and sustainable employment and respond to economic shocks”.

 

“It provides a fair and equal way to pay and save. It contributes to social and financial inclusion by being one option that enables people and businesses to pay and save and undertake other socially meaningful exchanges, like gifting to and rewarding others”.

 

We agree that “[Only] Central bank money performs [those] two vital tasks.”

Currently New Zealand does not have sovereignty over its money system.

Conclusion

The introduction of a CBDC should not be approached from the perspective of a touchy stepping stone that has to be designed to protect the private banking companies at the expense of the people. To do so would simply entrench the stranglehold over our financial system that private banking companies already have, rather than monetary sovereignty being at the very heart of everything the Reserve Bank does.

As you have stated “It provides a fair and equal way to pay and save. It contributes to social and financial inclusion by being one option that enables people and businesses to pay and save and undertake other socially meaningful exchanges, like gifting to and rewarding others”.

 

We agree that “Only central bank money performs this role“.


In conclusion we applaud the Bank for the work it is doing in moving to ensure the country’s financial system is fit for purpose in a rapidly changing digital environment. We do hope the Bank will ensure that its main priority is that any changes finally implemented are fit for purpose for individual New Zealanders and that corporate or private company interests do not override the interests of those individual New Zealanders.

Submission written by Chris Leitch and Lowell Manning.

 

Bank of England -  Money Creation In A Modern Economy (pdf)

 

German Central Bank - Money Creation April 2017 (pdf)