RBNZ invites consultation on cash stewardship role
(3 October 2019 - New Zealand) The Reserve Bank of New Zealand (RBNZ) has released a consultation paper on the shift towards cashless transactions.
The Te Moni Anamata programme is considering the implications of falling cash use for day-to-day transactions, including the impacts on the system that supplies, moves and stores hard currency.
The central bank proposes being given the legal responsibility for ensuring New Zealand continues to have an effective New Zealand Dollar (NZD) cash system by taking on an 'expanded stewardship role in the cash system, providing system-wide oversight and coordination'. The paper proposes two tools which, though not currently required, may be needed in the future to respond flexibly to the evolving needs of consumers including:
- The power to set standards for machines that process and dispense cash
- Set out regulation powers that enable the government and the RBNZ to require banks to provide access to cash deposits and withdrawals
The paper outlines the fact that the RBNZ is just one cog in a cash system machine which includes the banking system, armoured truck companies, retailers, and independent ATM providers and likely must invest in new more secure facilities to remain current.
"Our bank vaults in Wellington are ageing and we think the current arrangement is sub-optimal, with the Reserve Bank holding a large proportion of the country's banknotes and coins in Wellington. We see roles for all parts of the system - along with interest groups, whānau and individuals - in ensuring people who want or need to access or use cash can do so" commented Assistant RBNZ Governor Christian Hawkesby.
Across the ditch, the Reserve Bank of Australia (RBA) is also mulling the implications of an increasingly cashless society while also ruling out the abolition of cash altogether. The RBA reports that one in four banknotes are used to make legitimate day-to-day transactions.
“Between half and three-quarters are held as a store of value in safes, under beds and at the back of cupboards, both here in Australia and elsewhere around the world. We estimate that a further four to eight percent are used in the shadow economy, either to hide transactions from the tax office or to undertake illegal transactions. It appears that between five and ten percent of banknotes are either simply lost, maybe at the beach, or destroyed, perhaps in a natural disaster. So, as best we can tell, that is where all the banknotes are” stated RBA Governor Philip Lowe.