The deputy governor of New Zealand’s Reserve Bank (RBNZ) has said the institution is “not threatened” by the rise of bitcoin and digital currencies.
Spencer’s comments are in contrast to those of other central bank representatives over the course of this year, most of which have concerned warnings of bitcoin’s investment risk and/or lack of legal tender status.
“I do not doubt that future digital currencies will become more realistic substitutes for cash,” he said, also mentioning that, so far, bitcoin seems to “behave more like a commodity than a currency”.
Of greater concern to the deputy governor were new players’ involvement and security in the electronic payments industry in general, whether cryptocurrency-related or not.
The past 30 years have seen payments move from being primarily cash and cheques to more contactless, online and mobile phone-based systems.
Increased participation and new technologies brought with them increased operational risks, Spencer added, which could be disruptive to the economy. The general payments industry would have to manage these risks while still nurturing innovation and efficiency.
The RBNZ preferred a “non-intrusive” and “low-key” regulatory approach to digital currencies, Spencer said, as opposed to some foreign central banks which had strengthened their regimes lately.
The central banks of both New Zealand and neighboring Australia did issue mild cautions about bitcoin in December last year, but at the same time described the technology as interesting.
Then in July this year, RBNZ deputy governor and head of operations Geoff Bascand described digital currencies as a “challenge to the form and provenance” of money that could supplant cash, despite some problems with price volatility.
New Zealand is often noted for having one of the world’s most liberal economies, usually placing in the top five of the world Index of Economic Freedom along with Hong Kong, Singapore, Australia and Switzerland.
Notably, from 29th–30th November, the country will host its first bitcoin conference, Bitcoin South, in the resort town of Queenstown.
New Zealand image via Shutterstock