New Zealand Reserve Bank pauses digital cash project to focus on payments overhaul

The Reserve Bank of New Zealand has suspended development of its proposed central bank digital currency, redirecting effort toward a comprehensive plan to modernise the country’s payment system and introduce a real-time retail payment solution. Murat Ungor, an economist at the University of Otago who has previously argued that digital cash could strengthen New Zealand’s monetary sovereignty, said the pause is not concerning as long as the policy remains on the radar.

He explained that establishing a robust payments infrastructure first is logical, since any new form of money must fit within that framework. The bank highlighted potential benefits of modernisation, including lower transaction fees, reduced fraud, and opportunities for new products and services. At the same time, it acknowledged that cash usage is declining and private digital assets such as stablecoins are emerging, keeping the debate over a digital central bank currency alive. The Reserve Bank assured that digital cash would coexist with physical cash, promised clear criteria for any future resumption or cancellation, and pledged continued public engagement.