Are farmers ready for the waves of change?
What will the Reserve Bank do with interest rates, when will the Chinese economy recover and will the geopolitical situation in the world get better or worse?
The Reserve Bank is looking into a central bank digital currency (CBDC) and how it could allow transactions in the immediate aftermath of a natural disaster.
A RBNZ spokesperson told Rural News that one of the high level design considerations for a CBDC that the Reserve Bank will be exploring relates to transacting offline.
"This is when there is a temporary disruption to network connections such as in the immediate aftermath of a natural disaster, or simply because people need to make transactions in remote areas without network connections.
"This feature would allow people to access and use their money as needed."
Federated Farmers president Andrew Hoggard says the proposal "sounds useful".
"We would be interested in how that would actually work," he told Rural News.
Speaking at the University of Waikato 2023 Economic Forum last month, Reserve Bank Governor Adrian Orr described a CBDC as "an electronic signal that sits in the central bank that says I owe you something".
It's no different to an electronic signal that sits in a retail bank, Orr says.
"Except this time, it's with the central bank and because it's with the central bank, its narrow money, the true feared currency rather than broader money: created by the retail banks themselves through fractional banking," he explained.
"So, it's a true equivalent of a physical note: you've got an electronic signal with the same insider high-powered one-to-one relationship."
Orr told the forum that the CBDC is all about helping build resilience.
He says recent events like Covid and the North Island floods last month highlighted the need for resilience.
"We are all so thinly spread. It's all just-in-time, not just-in-case mentality in our society," says Orr. "We need to build up that resilience, need to have a simple cash management side. Yes, you may not use it day-to-day and all the time, but when you need it, it has to be available and immediately."
Orr points out that a CBDC won't remove the need for that resilience.
"You will have to be able to operate without power and without communications and without the law of the gun decided who gets the loaf of bread."
A CBDC could still be some time away. Last year the Reserve Bank announced it was commencing proof-of-concept design work, taking into account the public's feedback received during recent consultation. The work will be a multi-stage and multi-year effort, and no decision has yet been made on what form of CBDC was right for New Zealand, it said.
