PMNZ August Newsletter - Submission on Digital Cash or should that be Digital Public Money?
Welcome to the August 2024 newsletter. Here is a link to previous newsletters.
Our submission on Digital Cash
Positive Money has submitted a response to the Reserve Bank’s consultation Digital Cash in New Zealand. This continues its evolving CBDC (Central Bank Digital Currency) programme. As you’ll see in our response, Positive Money remains broadly supportive of the Reserve Bank’s work. However, there is a long way to go and opposition is building.
Some of that opposition was on display as several citizens’ groups and lobbyists put cases forward to stop the move to issue ‘digital cash’ before it gets started. The reasons ranged from “not needed – we already have digital money” to “the Government will use it to control you and your money”.
As we noted in our Introduction to our submission, privacy issues will be central to the success or failure of so-called retail CBDCs (i.e. a CBDC that is available to the public). We note there will be public expectations for cash-like anonymity and control. We asked the bank to be clear that ʻdigital cash must not be withheld or destroyed as a punitive measure for policy reasons, such as failing to comply with vaccine mandates.’
This did not come through strongly in the consultation paper. We also restate our position that physical cash must remain to provide the “yardstick of financial anonymity” for those who require the ultimate level of privacy.
There is concern, even fear in some quarters, that Reserve Bank-issued digital money will lead to dystopian outcomes. The claimed issues often arise from speculation rather than reality, but it’s perceptions rather than technicalities that will ultimately decide if the public gets behind digital public money (as we prefer to see it called.)
Refer to our web page on Digital Cash, for more detail.
Article questioning the Reserve Bank’s controls for inflation
Our belief in the quasi-religious power of the central bank to control inflation must be revisited, Rob Campbell writes, and we agree. Campbell says there are a number of reasons to doubt whether central bank action on interest rates is the appropriate response to our current ‘cost of living’ issues.
During July we:
called a special meeting that authorised the updating of our constitution, in the main to align with the requirements of The Incorporated Societies Act 2022.
Sent through links to items by Susan Edmunds, Money Correspondent for RNZ titled Can't the government give 2% home loans and a follow up item titled What happened when the government gave cheap home loans?
Nga mihi
Don Richards