Latest / Best of Business / Ian Woolford: Reserve Bank Director of Money and Cash on Kiwis staying keen on physical money

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Ian Woolford: Reserve Bank Director of Money and Cash on Kiwis staying keen on physical money · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 2: The Reserve Bank says most of us are still keen
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  Speaker 2: on using physical cash. It recently asked for feedback on
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  Speaker 2: making cash available in a digital form, and the bank
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  Speaker 2: says it drew the highest number of responses it has
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  Speaker 2: ever received on anything it is asked for. Eighty four
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  Speaker 2: percent of us we're worried about losing access to physical cash,
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  Speaker 2: with big concerns around the privacy of how we spend
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  Speaker 2: our money. The Reserve Banks Director of Money and Cash
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  Speaker 2: is Ian Wilfred and thanks for being on the show.
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  Speaker 2: Why do people want the secrecy of cash?
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  Speaker 3: I think there are good reasons why people worry about
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  Speaker 3: their privacy, and you know it's a personal choice. You know,
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  Speaker 3: money is quite a personal thing and I think it's
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  Speaker 3: quite natural for people to have concerns about people monitoring
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  Speaker 3: their use.
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  Speaker 2: Is that what would happen with a digital currency?
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  Speaker 3: No, No, not at all. In fact, you know, we've
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  Speaker 3: been very clear that privacy is is really important to us.
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  Speaker 3: We put out a big paper on it when we
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  Speaker 3: did our consultation. This is why we call it digital cash.
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  Speaker 3: It's to replicate cash. You know, it's private, it's quick,
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  Speaker 3: you know you can it's fast to rep you can
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  Speaker 3: use it offline. That's what we call it digital cash.
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  Speaker 2: And what what am I? What am I holding? Or
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  Speaker 2: how do how do I pay with it?
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  Speaker 3: Well, just as you you use different ways of paying
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  Speaker 3: using your private bank account. Now you might use a
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  Speaker 3: digital wallet, you might use a card, you might just
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  Speaker 3: plug it into the internet. It would be the same
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  Speaker 3: with digital cash.
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  Speaker 2: Right so might just be a choice that you have
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  Speaker 2: my debit card right now? I you know I have
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  Speaker 2: cash in my bank account. Well I don't. I mean,
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  Speaker 2: that's the thing. Really, I don't do it. I had
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  Speaker 2: there's a number are on a screen. I mean, how
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  Speaker 2: is it? How is it different? I guess? How is
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  Speaker 2: digital cash different to what I do with my debit
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  Speaker 2: card right now?
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  Speaker 3: Well, there are a few differences. One is you could
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  Speaker 3: use it person to person. So rather than transferring money
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  Speaker 3: from your bank to another person's bank and then eventually
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  Speaker 3: they get it, you could just do it direct. So
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  Speaker 3: you've got your digital wallet on your phone, someone else
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  Speaker 3: has got a phone. That's what we call peer to peer.
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  Speaker 3: It's direct. You could do it offline, so when the
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  Speaker 3: powers out, the internet's down, you'd still have that functionality.
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  Speaker 3: You can't do that at the moment. You can do
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  Speaker 3: it with cash, but you can't do that with your
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  Speaker 3: private lack of bank accounts.
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  Speaker 2: What about then, I think I get my head around that.
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  Speaker 2: What about the privacy issue people have with digital cash?
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  Speaker 2: Then how do you say, we know one will know
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  Speaker 2: even though it's digital, no one will know what you're
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  Speaker 2: spending your money on.
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  Speaker 3: So at the moment you know, when you do any
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  Speaker 3: form of digital transaction, it leads, it leads a trail, right,
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  Speaker 3: there's a footprint there. But what we've said is the
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  Speaker 3: reserve bank who will issue the digital cash won't see
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  Speaker 3: any of the transactions because the way you'll do the
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  Speaker 3: transactions is using a digital wallet, So the reserve bank
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  Speaker 3: won't see the details.
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  Speaker 2: Of that, right.
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  Speaker 3: So that's the point that we're making.
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  Speaker 2: Right, So you won't, but someone will, which I guess
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  Speaker 2: is what people are worried about, which is why they
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  Speaker 2: like physical cash, because you have complets cot all right,
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  Speaker 2: So will you ever take physical cash away from us?
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  Speaker 3: Absolutely not. In fact, the two things that really matter
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  Speaker 3: to people are privacy and we care about that as
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  Speaker 3: well and keeping physical cash, and we care about that
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  Speaker 3: as well. We're doing a lot of work on cash
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  Speaker 3: trials and rural communities. We're looking at how do we
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  Speaker 3: make the cash system continue to be there for people.
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  Speaker 3: So digital cash is not an attempt to replace for cash.
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  Speaker 3: It's to give people choice of do you want digital
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  Speaker 3: or physical or do you just want to use your
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  Speaker 3: bank account money.
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  Speaker 2: Currently in New Zealand you only have to accept cash
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  Speaker 2: as a business for debt, that's my understanding of it.
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  Speaker 2: In Norway, because of the risk of Russia and cyber attacks, etc.
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  Speaker 2: They're actually moving back towards cash and they're changing the
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  Speaker 2: law to make it compulsory for food outlets like a
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  Speaker 2: supermarket or a petrol station to accept cash in order
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  Speaker 2: that they encourage cash and society. You know, should they
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  Speaker 2: need it, should the power goo art, et cetera. Would
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  Speaker 2: we look at something similar here. Not that Russia is
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  Speaker 2: a concern, but we have frequent weather events.
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  Speaker 3: We are looking at all of those issues right at
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  Speaker 3: the moment. So we did a big consultation a few
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  Speaker 3: years ago saying, you know, there's a whole lot of
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  Speaker 3: issues in the cash system at the moment. We need
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  Speaker 3: to look at things like cash acceptance and cash availability.
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  Speaker 3: So we're looking at all of those issues and in
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  Speaker 3: fact a lot of countries around the world are getting
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  Speaker 3: more serious. Australia has just made announcements about, you know,
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  Speaker 3: retailers having to accept cash, so we're definitely looking at
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  Speaker 3: all of that because we care about the cash system.
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  Speaker 2: Thank you. I that's in Wolford with me, the Reserve
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  Speaker 2: Bank Director of Money and Cash.
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